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6 Strategies to Pay Off Credit Card Debt in 2024

Last updated 03/19/2024 by

Andrew Latham
Do you have a growing credit card debt that you feel you will never pay off? You are far from alone.
According to a study published by the Federal Reserve Bank of Boston, only 35% of credit card users are “convenience users.” These are folks who pay their balances in full every month and have $0 credit card debt. No debt means no interest owed.
Revolvers, on the other hand, are credit card users that carry a balance on their accounts. They account for 65% of credit card users. On average, people who carry a balance owe $15,700 per person: a total of $980 million. As a result, they pay interest on their outstanding balances each month.
How can you gain control over your debt and start using credit cards to your advantage? In this guide, we’ll share 6 strategies that may be able to help. Plus, find answers to frequently asked questions about paying off credit card debt.

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How to pay off credit card debt? Here are 6 strategies

Looking for a debt payoff plan for your credit cards? The good news is there is more than one way to do it. Here’s a look at six options you can consider.

1. Pay your minimum payment 2x per month

Want to greatly cut down the time it takes to pay off your debt? Instead of only paying your minimum payment amount each month, pay double.
What difference will that make?
Let’s say you’re an average “revolver.” In other words, you owe about $15,000 in credit card debt, and you have a 15% APR. Your minimum payment would be a whopping $600 a month. Sorry to be the bearer of bad news, but it will take you 13 years and 7 months to repay your balance on that schedule.
However, if you always pay double your current minimum payment, $1,200, and stick with it, you could pay off your outstanding balance in just one year and two months. Plus, you’ll save $5,311.43 in interest payments!

2. Consolidate your debt

There are two main ways to consolidate your credit card debt: with a debt consolidation loan or a balance transfer card.

Pay your credit card debts with a debt consolidation loan

A debt consolidation loan can help you save money on interest by getting a lower interest rate. It also streamlines your finances and allows you to pay off debt faster. Consolidate your debt and make fewer payments each month.

Transfer your debts to a 0% APR balance transfer credit card

Next, you could consider transferring your highest interest credit card debts to a 0% APR balance transfer card. If you have $15,000 in debt and an average 15% APR, you could save $1,940 in interest from just 12 months with a 0% APR. Combine a 0% APR balance transfer with an aggressive repayment plan, and you could repay your entire debt in less than a year.
However, remember, you have to get approved, and balance transfers are not always free. The APR might be 0%, but APRs don’t include balance transfer fees which can be as high as 5%. There are balance transfer credit cards, such as Slate, that don’t charge transfer fees, but these are rare. This doesn’t mean you shouldn’t transfer your credit balance. Just make sure you take into account all fees when calculating the pros and cons of this route.

3. Pay the credit cards with the highest interest rate first

Another strategy is the avalanche method. With this one, you focus on paying down the balance with the highest interest rate first. Meanwhile, you continue to make the minimum payments on any other cards you have.
To get started, write down all the cards you have along with the interest rate for each card. If you have student loans, you may want to factor them into the equation as well. Identify the account with the highest interest rate. Then, begin paying all the extra money you have to that card.
For example, let’s say you have three card accounts:
  • #1 has a balance of $5,000 and a 13% APR
  • #2 has a balance of $8,000 and a 20% APR
  • #3 has a balance of $2,000 and a 12% APR
You would pay off #2 first, then #1, and then #3. If you can afford to make $800 in monthly payments and follow the debt avalanche method, you could pay $2,226.38 in interest and be debt-free in one year and 11 months.
If you don’t qualify for a 0% APR balance transfer card, this can be the next fastest and cheapest way to reduce your credit debt on a budget.

4. Debt snowball method

The debt snowball method is a popular way to cut your credit card debt. What does that mean? Step 1 is to pay as much money as you can on your smallest balance while making the minimum payments on your other cards. Once the first credit card is paid off, move on to the next smallest debt until you are debt-free.
The debt snowball method was popularized by Dave Ramsey, and it has the advantage of providing quick wins. Those wins give you the motivation to stay on track with a debt repayment plan.
Although the debt avalanche method will save you more money than the snowball method, making it the more rational approach, humans are not always rational. A study by a team of Kellogg School researchers found that people with large credit card balances are more likely to pay down their entire debt when they follow the debt snowball method. Yep. As any casino manager will tell you, the lure of small wins is powerful.

5. Request an APR reduction on your debts

You may think it’s unlikely that a credit card company will voluntarily reduce their interest rates, but it’s far from rare. In fact, if your credit history and scores are good, your chances of scoring a rate reduction are excellent. The credit industry is a competitive market, and credit card companies know it’s much more expensive to gain a new client than to keep a good client happy.

How to request an APR reduction:

  1. Check your credit scores. Find free credit monitoring options here.
  2. Gather the following data about your credit card account: How long you’ve owned the card, your credit card limit, how much you owe on the card, and how many times you’ve made a late payment.
  3. Estimate the best interest rates you can get. Be realistic.
  4. Fill in the blanks on this script. Then, call your credit card company and read it.
Hi, my name is __________. I have been a loyal customer for ___ years, and I haven’t made a late payment in the last __ months (or ever). My credit score is excellent/good/fair, and I receive several offers in the mail for other credit cards. I need a lower APR, or I will cancel my card and transfer my balance to another company.
If the operator refuses to lower your interest rates, ask to speak to a supervisor and repeat the script. You may be surprised by how much money a five-minute call can save you.
For example, if you owe $15,000 in debt on credit cards, you make monthly payments of $800, and your APR is 20%, you will pay $3,136.19 in interest. Reduce your interest rate to 15% APR, roughly the national average in 2021, and you will save $936.33 in interest and pay off your debt a month earlier.

6. Debt settlement

All of the previous debt reduction methods require you to either have decent credit or have extra money to make more than the minimum payments on your debts. But what if your credit is not great and you can’t afford to make the minimum payments?
In that case, you may need to go straight to DEFCON 2 and negotiate a debt settlement with your credit card company. In this case, DEFCON 1 is filing for bankruptcy. Credit card companies are very aware of two facts:
  • Bankruptcy is always a way to pay for less than you owe for consumers overwhelmed by crushing debt.
  • Unsecured loans, such as credit card debt, can be discharged (removed) with bankruptcy.
If you’re unsure which path is best, it can help to talk to a credit counseling agency.

How to pay off credit card debt with a debt settlement

Negotiating a debt settlement with your credit card company requires you to stop making minimum payments. Instead, you deposit all you can afford into a settlement account. Consider this account as a war chest with which to negotiate a reduction on your debt balance.
The reason for this step is because if you continue making minimum payments, the credit card company has no incentive to grant you a settlement. Of course, failing to make minimum payments and negotiating a settlement will most likely hurt your credit, so you’ll have to weigh that con into your decision.
Although you can negotiate a settlement by yourself, many find that professional debt relief companies provide better results. Debt relief firms understand the protocols used by credit card companies and what requirements a debtor must meet to qualify for debt reduction. These companies do charge for their services, but fees should only be due once an account is settled and they are paid from the savings generated by the settlement.
Click here for a detailed guide on how to pay off your credit card debt.

Summary: A quick guide to paying off credit card debt

Want the short version? Keep these debt payoff tips in mind:
  • If your budget allows it, double your payments across the board.
  • If you can qualify, transfer your debt to a balance transfer card with a 0% intro APR period. Otherwise, consider a debt consolidation loan that lowers you interest rate or allows you to pay off your debt faster.
  • If you can only pay a little extra each month and have a lot of discipline, start by paying off the card with the highest interest rate first.
  • If you easily get off track, start by paying off the smallest balance first.
  • If your credit scores are good, ask your credit card issuer for an APR reduction.
  • If you can barely afford to make minimum payments, consider negotiating a debt settlement with your credit card company.
Regardless of what method you choose, the important thing is to choose one and get started.

Frequently asked questions about paying off credit cards

Now, let’s take a look at some of the most frequently asked questions about paying off credit cards.

Does paying down credit card debt help your credit score? What are the benefits?

It makes sense to repay your credit card as soon as possible because it saves you money on interest and boosts your credit score. The higher your credit utilization is (your outstanding balance divided by your available credit), the lower your credit score will be.
Credit scores are important and can help you in various situations, from renting a home to buying a house to signing up for a phone plan. Even employers can look at them to determine your financial reliability. So, you’ll want to keep yours in as good of shape as possible.

When does it make sense to pay off your credit card debt with a personal loan?

Paying off credit card accounts with a personal loan can make sense. However, it will make the credit available on your cards once again. It’s important that you don’t rack up more debt. Further, you’ll need to ensure that the loan fees don’t negate any savings from the lower APR.
However, if consolidating your debt into a personal loan can help you lower your cumulative interest rate, afford your monthly payments, and/or lower your overall cost, it can be a good move.
It’s smart to compare debt consolidation loan offers from multiple personal loan lenders so you can run the numbers and see if it makes sense.
Where can you find a personal loan? Supermoney can help you review and compare various personal loan offers side-by-side online in minutes.

What if you don’t qualify for a debt consolidation loan?

It can be hard to qualify for a personal loan or for one with the rates and terms you need, especially when your credit cards are maxed out. Lenders will see you as high risk. You may need a more aggressive approach, such as consumer credit counseling, debt settlement, or filing for bankruptcy.

What are some strategies to pay down credit card debt?

How can you muster the extra funds to pay more towards your credit cards? It may be time to take a close look at your budget and trim down your monthly expenses. Could you cut out the gym membership and work out at home? Or maybe you could cut down on your weekly food costs by eating-in rather than eating out. Whatever the case may be for you, look for opportunities to cut any extras from your budget and redirect them to your debt.
You may also want to consider using your savings to pay down your balances. We know, we know, everyone needs a savings account as a cushion. But the fact of the matter is, credit card debt cancels out any interest you’re earning from a savings account. One way of looking at it is that, on average, every dollar a person has in the bank is losing 16 cents per year for as long as they have outstanding credit card balances. Consider using your savings to pay off your debt, and then focus on rebuilding your savings.

Do you qualify for a debt reduction plan?

Debt reduction companies determine an applicant’s eligibility by looking at their financial situation. They will ask questions such as: Is the debt due to financial hardship? Was your debt load caused by medical bills, job loss, or divorce? Situations like these can explain the existence of legitimate financial hardship rather than a person looking for a quick fix for frivolous and irresponsible spending.
The second issue is whether you have sufficient resources to put a debt reduction plan into effect. Although a debt settlement will reduce how much you owe, you still need to be able to pay off a lump sum. Debt reduction companies will likely look at your monthly income and assets to determine how much you can afford to put toward lump-sum payments.

Should you attempt to reduce debt yourself or not?

Settling debt yourself is always an option. However, many people benefit from getting help. Here are two factors to consider.
  • First, how much do you owe? Debts of $7,500 or less are more manageable, so you have a better chance of successfully negotiating them yourself.
  • Second, how comfortable are you at negotiating? How much time do you have to spend on negotiating? Remember, banks do not have to respond favorably, and it might take a considerable amount of time and effort for a settlement to be reached.
In some cases, it makes sense to let the experts take care of it. Plus, they may be able to save you more than you could save on your own.

What are the benefits of having a debt settlement company help you?

Debt settlement firms are well-versed in how to negotiate settlements. If you have significant debt, debt settlement companies can save you money. One advantage is that, unlike bankruptcy attorneys, debt relief firms don’t charge upfront fees for their services.

What to look for when hiring a debt settlement company

What should you look for in a debt settlement company?
You’ll want a reputable firm with a fair pricing model. You should only pay a percentage once they have effectively reduced one of your debts. Unfortunately, some companies in this industry have been found to follow predatory practices. Never hire a company that tries to charge you upfront and avoid those that charge a monthly maintenance fee.
Additionally, look for firms with debt arbitrators who are:
These associations hold their members accountable for following the best practices of the industry. Further, it never hurts to check reviews from past clients to find out the company fares in the eyes of its customers.

Find the help you need to pay off your debt once and for all

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Not sure where to find reputable debt settlement firms you can trust? We’ve got you covered. Check out SuperMoney’s debt settlement review page to compare firms side by side and find the right fit for you!

Andrew Latham

Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.

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