The Fastest (and Cheapest) Way to Pay Off Credit Card Debt


By now, you’ve heard it a million times: Credit card debt is a huge drain on your finances. But indulge us while we explain just how dangerous it really can be.

Let’s say you, like the average American household with credit card debt, carry a $15,500 balance on your cards, which have the average interest rate of nearly 17 percent. If you pay a 3 percent monthly minimum, it’d take 21 years—that’s more than two decades—to zero it out. Oh, and you’d spend more than $13,000 in interest.

“It should be your highest priority to get that debt paid off,” says Cary Carbonaro, a Certified Financial Planner and author of “The Money Queen’s Guide.” “It keeps you from saving, funding your retirement, and [discretionary] spending. It’s almost like you’re charging today and mortgaging your future.”

Ready to get out of the red? Here’s how to free yourself from that plastic ball and chain—fast.

1. Step away from the Visa.

It sounds obvious, but your first step is to stop swiping. After all, it’s tough to make progress when you keep adding to your balance.

Take your card out of your wallet to remove temptation, but think twice before you close the account—especially if you’ve had it a long time—as this could have an adverse effect on your credit score.

2. Inch your payments up each month.

Next, revisit your budget for a clear picture of how much you can realistically dedicate to credit card debt repayment above the minimum. Look through old bank statements for blind spots where you may have been wasting money (like out-of-network ATM fees, say, and subscriptions you no longer use). Analyze areas of spending where you can scale back or push off purchases, then redirect those savings toward paying down your debt.

And assess your debt, including interest rates and minimum payments. Knowing these numbers can help you create the most cost-effective repayment strategy, which is generally attacking the balance with the highest interest rate first, then working your way down the list (while paying at least the minimum on other balances, of course). But before you settle on a strategy…

3. Research balance-transfer offers.

Kate Hao, founder of, a site that connects consumers and lenders, recommends contacting your bank or credit card company first to find out if they can offer you a break. “Explain you want to pay off debt, and develop a plan with them,” she says.

They might lower your rate or hook you up with a new, lower-rate or 0-percent-interest card to which you can transfer your existing balances. If you’re aggressively wiping out debt, this can be a big boon.

Remember our $15,500 debt example? Let’s say you transfer that balance to a no-interest card and pay $465 every month (or 3 percent of the original total). Even if the rate spikes to 19 percent after 18 months, when you’d paid all but $7,130, it’d take just a year and a half longer to pay off the total balance—and you’d fork over a little more than $1,100 in interest.

Even if your bank won’t play ball, you can search for attractive offers on sites like,, and Depending on your credit, you may be able to qualify for credit cards that offer favorable interest-free allowances and other terms.

Whichever you choose, remember to read the fine print to make sure you’re not surprised by transfer fees and can, ideally, set a budget that allows you to pay off the balance before the interest jumps.

4. Consider a personal loan.

A final option for zeroing out credit card debt is transferring it to a personal loan—a strategy credit expert John Ulzheimer says may not actually translate to dollar savings, but is likely to improve your credit. That’s because revolving debt, like card balances, is more harmful to your score than installment debt, like personal loans.

“In the most extreme cases, someone’s score could improve by triple digits, but for most, it would range from the low double digits to mid-high double digits,” says Ulzheimer.

And with an improved FICO score, you can nab a better rate down the road on a more worthwhile loan, like for a car or mortgage, and save money on that interest, he points out.

Talk to your bank or creditor about loan options, or search sites like to compare lenders, which might include online or peer-to-peer companies, such as SoFi, Earnest, and Prosper. These smaller players have more wiggle room when it comes to whom they’ll approve and at what rates, so if you don’t get good terms with the big banks, you may have better luck with them.

5. Once you’re debt-free, charge sparingly.

This may seem obvious, but it’s easy to overdo it once you start using your credit cards again. An easy way to stay on top of it: Charge only what you can pay off each week. That way you’ll be more likely to check yourself before you swipe. And paying it off weekly will also keep your balance low compared to the total credit available, which can help keep your credit score up.

This article was updated in August 2018.