How to Pay Off Credit Card Debt
Listen, if credit card debt is stopping you from paying your bills or keeping you up at night, I see you.
Pay off debt fast and save more money with Financial Peace University.
Back in the day, my husband and I had over $20,000 of credit card debt. I still remember how ashamed I felt. I used to keep my phone on silent and turn it screen-side down so no one saw all the missed calls from the credit card companies. But it doesn’t have to be that way!
It’s time to drop it like it’s hot. (Sheesh, people, I’m talking about dropping your debt!) Here’s how to pay off credit card debt fast—one step at a time.
Ways to Pay Off Credit Card Debt
Paying off credit card debt—or any debt—is never easy (and anyone who says different might be scamming you). There are plenty of so-called “quick fixes” out there for credit card debt, but most of them will only add more money problems to your plate.
So, let’s talk about the most popular credit card payoff strategies—and whether or not they’ll actually help you get out of debt.
1. Debt Snowball
The debt snowball method is the best way to pay off credit card debt—and the fastest way. (Trust me: I know from personal experience!) Here’s how the debt snowball works:
- List all your debts from smallest to largest. If you’ve got multiple credit cards, list the balances individually. And if you’ve got other debt, like car loans, personal loans or student loans, be sure to include those too. Don’t worry about the interest rates right now—just focus on the balances.
- Start making minimum payments on all your debts, except the smallest. This is important because you don’t want 1-800-Pay-Me (aka debt collectors) blowing up your phone.
- Attack your smallest debt with any and all extra money you can get. Knock it out as fast as possible! (I’ll give you some tips on how to do that in a bit.)
- When that smallest debt is gone, take what you were paying on it and put it toward the second-smallest debt until it’s paid off. Continue to make minimum payments on your other debts.
- Keep doing that until all your debts are gone! Remember, each time you pay off a balance, you’ve got that much more money to throw at the next debt—like a snowball rolling downhill. It’s unstoppable. You’re unstoppable. That credit card debt (or any debt) doesn’t stand a chance!
The debt snowball is all about motivation and momentum. Instead of trying to do everything at once, it gives you a game plan to attack your debts—one at a time. That’s why you start with the smallest balance first.
Right about now you might be thinking, Jade, why not tackle the debt with the highest interest rate first? I know, I know. But the truth is, what you really need right now is a quick win. And the best way to start off strong and stay motivated is to knock out that smallest debt ASAP and feel that win.
Take it from someone who knows. When it comes to paying off debt, money is mostly about your mindset, not math. Once you get that first debt behind you, you’ll be on fire and ready to knock out the next debt!
2. Debt Avalanche
Unlike the debt snowball, the debt avalanche is a method that focuses on paying off the debt with the highest interest rate first. But the problem with this method is rooted in motivation.
With the debt avalanche, your first targeted debt might be a huge balance that could take a long time to pay off. But you need quick wins that encourage you to keep going! The debt avalanche sounds nice in theory, but it takes too dang long to see real progress.
Remember: Paying off debt is less about math and more about behavior. When you experience a win, your body gets a shot of dopamine and wants to continue that behavior. A study published in Harvard Business Review fully backs up that the debt snowball is the most effective path to debt freedom. 1 So, sorry, debt avalanche, but in the words of Ariana Grande, “Thank you, next!”
3. Credit Card Balance Transfer
A credit card balance transfer is when you move all your credit card debt onto one new credit card that has a low interest rate. Here’s the thing: I’m not mad at you for considering it. But it’s not the solution. You might lower the temperature of the fire temporarily, but please believe you are still on fire. You didn’t actually pay anything off.
You could also get hit with transfer fees and risk going blind reading the fine print. Okay, that last part is an exaggeration—but there’s no exaggerating that huge spike in your interest rate when you make just one late payment or the introductory period expires.
Remember, what you owe (aka the debt) is your main problem. The interest rate is just an annoying symptom. So, let’s stay focused on paying off that credit card as fast as possible, instead of moving the debt around—because it’s burning up your money!
4. Personal Loan
If you’re already in credit card debt, you might be tempted to take out a personal loan to pay it off. But taking out more debt to cover your other debt only traps you further in the debt cycle. Instead of just moving your debt around, you need to deal with it head on.
5. Debt Consolidation
When you consolidate your debt, you basically take out a loan to combine your debts into one single payment. This sounds like a good idea until you realize that it actually extends the length of your loan, which means you’re in debt for way longer.
Also, in most cases, the interest rate still depends on your credit score. I’m not a fan of the credit score (aka your “how much do I love debt?” score), but if you’ve got credit cards, you’ve got one. And you should know, if your credit is a hot mess, your interest rate will be too. Plus, if you do happen to snag a low interest rate that seems too good to be true, know that bad boy will usually go up over time.
6. Debt Settlement
Debt settlement companies will charge you a fee and promise to negotiate with your creditors or reduce the amount you owe. Wait a minute—why pay someone to do something you can easily do yourself for free?
The truth is, these companies usually just take your money and leave you drowning in the debt you already had—plus all the new late fees that built up when no one was paying on your balance.
7. Credit Card Forgiveness
Watch out for debt relief companies that advertise credit card debt forgiveness! These are just debt settlement companies trying to pull a fast one on you. Do you see a trend emerging here? None of these options are a true solution. They are just hoaxes that will keep you busy but not productive in paying down your debt.
8. 401(k) Loan
Unless you’re facing bankruptcy or foreclosure, never ever borrow from your 401(k) to pay off your debt. I repeat—never borrow from your retirement! Not only will you get hit with penalties, fees and taxes on your withdrawal, but you’re also stealing from your own future. And I know y’all know better than that!
Oh, and if you mess around and get fired or quit your job, the full amount of that 401(k) loan immediately becomes due. That’ll turn your emergency into a full-blown crisis.
9. Home Equity Loan
A home equity loan is a second mortgage that borrows against the equity you’ve built up in your home and uses your house as collateral. In other words, you’re trading what you actually own of your home for even more debt. This puts you at risk of losing your house if you can’t pay back the loan on time. Talk about making a bad situation worse.
I’m going to go ahead and say that out of all the terrible options we’ve talked about so far, this one may take the cake as the worst! Don’t mess with a home equity loan unless you also like the idea of possibly losing your home.
10. Borrowing Money From Family and Friends
I don’t care who you are or how rich Uncle Boo Boo might be, borrowing money from family and friends is a recipe for drama. Not only will it make Thanksgiving dinner extremely uncomfortable, but it also turns that loving uncle (or your friend) into a debt collector. And no family needs that extra tension—especially around the dinner table.
How to Pay Off Credit Card Debt Faster
As I’ve already said, the debt snowball is the best way to pay off credit card debt. But there are other things you can do to get out of credit card debt faster.
Get on a budget.
A budget is like a toothbrush—everyone needs one, and without it, things get ratchet real quick. If you really want that credit card debt gone, you need a plan for your money. I’m talking a zero-based budget. It’s up to you to tell your money what to do and where to go. And in this case, you need as much of your money as possible going straight toward your debt.
Go ahead and create a free budget with EveryDollar. Start by taking care of your essentials. Then be honest about what you’re spending each month on the fun stuff (eating out, trips to the nail salon, streaming services). If you’ve got any extra money in your budget, throw it at your smallest debt!
Lower your spending.
Once you’ve created your budget, it’s time to free up some cash to help you pay down your credit card debt. So, take a good, hard look at your budget. What expenses can you cut?
If you need some ideas of where to start cutting, ya girl has got a few:
- Restaurants (eating out will eat into your budget big time)
- Entertainment (this includes sports games or going to the movies)
- Cable or streaming subscriptions (for now, sit through the ads on those free versions)
- Daily coffee runs (you can be your own barista)
Also, find ways to lower your monthly bills and save money in the categories you can’t cut completely. You can do this by watching your electricity use, meal planning, or choosing generic over name brands.
If you make enough small changes, you’ll feel like you got a raise! Just make sure you’re also intentional about putting your freed-up money toward paying off debt—not wasting it on unnecessary or impulse purchases.
Earn extra money.
Another way to help you get rid of that credit card debt faster? Find ways to increase your income.
Try selling your stuff. Or see if you can work extra hours at your current job. You can also snag a side hustle (or two!), like driving for Uber or delivering groceries with Shipt.
Don’t be afraid to use the skills you have to tutor, babysit or take freelance gigs. You could also do what I did and teach music or sell cakes. Either way, you better be working! Will it take more of your time and energy? Yes. But will it help you pay off your debt faster? Most definitely!
Life is about trade-offs. This is just a season of cutting back and working harder, but it means you’re on the path to being credit card debt-free. And that’s worth every ounce of sweat you’ll pour into this thing. I did it. I know you can do it too!
What Should I Pay Off First? How to Prioritize Your Debt
Managing debt can feel overwhelming when you’re balancing credit cards, loans and monthly bills. Without a clear strategy, interest can quickly add up, and some debts may start to feel more urgent than others.
This article will walk you through the best ways to prioritize debt and bills, including methods like the debt snowball and debt avalanche, so you can create a plan that works for you.
Why Prioritize Debt?
Paying off debt strategically isn’t just about clearing balances—it’s about saving money and protecting your financial future. Here’s why prioritization matters:
- Interest Costs: Debts like credit cards carry high interest rates, which grow over time and make your debt more expensive.
- Avoiding Legal Trouble: Some debts, like unpaid taxes, can lead to legal action if ignored.
When managed carefully, debt reduction improves your cash flow and gives you more financial flexibility.
Different Strategies for Paying Off Debt
Debt Snowball Method
Focuses on paying off the smallest debts first, regardless of interest rate. This method helps you build psychological momentum by achieving quick wins.
Example: Pay off a $500 credit card balance first, even if it has a lower interest rate than other debts.
When to use: If you need motivation and prefer immediate results, this method is highly effective.
Debt Avalanche Method
Prioritize the debt with the highest interest rate to save money in the long run. Make minimum payments on all debts but target any extra cash toward the highest-rate debt.
Example: Pay off a 24% APR credit card before addressing a 7% car loan.
When to use: If your main goal is to minimize total interest paid, this strategy is ideal.
Triage Approach for Urgent Debt
Focus on resolving debt that could cause immediate harm, like tax debt or payday loans. Paying off debts in collections first may protect your credit and prevent lawsuits.
When to use: This approach is necessary if you have urgent or legal liabilities.
What Loans to Pay Off First?
High-Interest Loans and Credit Cards
These should be your top priority because they carry compounding interest. Payday loans, with APRs over 400%, are especially dangerous and should be eliminated quickly.
Student Loans
While student loans generally have lower interest rates, federal loans may offer forbearance or forgiveness programs. Consider focusing on private loans first, which have fewer repayment options.
Mortgage and Car Loans
These are often lower priority since they come with lower interest rates and longer repayment terms. Making occasional extra payments on these loans can reduce long-term interest.
Which Bills to Pay Off First?
Tax Debt
Always prioritize tax obligations to avoid penalties, wage garnishments or liens.
Debts in Collections
Address debts that have gone to collections to protect your credit health and prevent legal action.
Essential Bills (Rent and Utilities)
Pay rent, utilities and other essential bills on time to avoid disruptions in your daily life.
Credit Cards vs. Loans—Which Should You Tackle First?
Credit Cards
Credit cards typically have higher interest rates than loans, making them a higher priority. If possible, transfer balances to 0% APR cards to save on interest during the promotional period.
Installment Loans (Car, Personal and Student Loans)
Installment loans have fixed repayment schedules and lower interest rates. As long as you stay current, these loans have less immediate impact on your credit compared to revolving credit like credit cards.
Creating a Personalized Debt Payoff Plan
- List All Debts: Record balances, minimum payments and interest rates for each debt.
- Select a Strategy: Choose between the debt snowball or avalanche method based on your financial goals.
- Set Aside Emergency Savings: Having a small emergency fund ensures you don’t accumulate more debt in case of unexpected expenses.
- Explore Debt Consolidation Options: If you have multiple high-interest debts, consider consolidating them into a loan with a lower interest rate.
Staying Debt-Free After Payoff
- Build an Emergency Fund: Aim to save 3–6 months’ worth of expenses to avoid future debt.
- Use Credit Cards Wisely: Keep your credit utilization below 30% and avoid unnecessary spending.
- Track Spending and Budget: Regular budgeting ensures you remain on track with your financial goals.
Final Thoughts
The key to paying off debt is consistency. By choosing the right strategy—whether it’s the snowball, avalanche or triage method—you can make steady progress and stay motivated.
Prioritize your debts based on their impact and select methods that align with your goals. With discipline and a solid plan, financial freedom is within reach. Celebrate small wins along the way and stay focused on building a debt-free future.
Timi Joy Jorgensen, PhD
Academic Panel Reviewer
financial education, planning, financial education, financial stress, financial management, women and financial services Utah Valley University, University of Georgia PhD
I am passionate about improving financial wellbeing through financial education, financial mindset management, and decreased financial stress for all people. So, I partner with like-minded professionals and organizations to improve the wellbeing of specific audiences through research, inclusion, partnership, and innovation.
Chris Kissell
Chris Kissell has been a writer and editor for more than two decades. His work has appeared in numerous newspapers and magazines, and on many news websites, including U.S. News & World Report, MSN and Fox Business. He lives in Denver, Colorado.
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