How to pay off credit card debt (2024)

If you have credit card debt, you're not alone: Americans owe a record $1.08 trillion on their cards,according to credit reporting agency Experian, with the average balance pushing past $6,300.

Carrying a large balance increases your debt burden, hurts your credit score and negates any benefits you're getting from your card's rewards plan. And with credit card interest rates at historic highs, it can be harder than ever to get out from under.

Below, CNBC Select reviews the best ways to chip away at your credit card bills, whether you've got one card or a walletful.

What we'll cover

  • Using a balance transfer credit card
  • Consolidating debt with a personal loan
  • Borrowing money from family
  • Paying off high-interest debt first
  • Paying off the smallest balance first

Using a balance transfer credit card

You can avoid crushing interest rates by transferring debt from high-interest cards to a balance transfer credit card that has zero interest for up to two years.

If you want a long time to pay off your debt, the Citi Simplicity® Card offers a 0% intro APR for 21 months and a 3% intro fee when you transfer within the first four months of opening your account. After the introductory period, there's a 19.24% - 29.99% variable APR on balance transfers.

Citi Simplicity® Card

On Citi's Secure Site

  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening.

  • Regular APR

    19.24% - 29.99% variable

  • Balance transfer fee

    There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

See rates and fees. Terms apply. Read our Citi Simplicity® Card review.

Another option is the Wells Fargo Reflect® Card, which charges 0% APR for 21 months on purchases and qualifying balance transfers made within 120 days of opening the account, (then18.24%, 24.74%, or 29.99% variable APR thereafter.)

Wells Fargo Reflect® Card

  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    0% intro APR for 21 months from account opening on purchases and qualifying balance transfers.

  • Regular APR

    18.24%, 24.74%, or 29.99% Variable APR on purchases and balance transfers

  • Balance transfer fee

    5%, min: $5

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

See rates and fees. Terms apply.

There are some limitations to this strategy: Balance transfer cards typically set caps on the amount you can transfer and you can't transfer a balance between cards issued by the same bank. In addition, you'll need a FICO credit score of at least 670, which is considered good or excellent.

Make sure to read the fine print before you apply for a transfer.

Consolidating debt with a personal loan

If you don't want to add another credit card, a personal loan provides you with cash over a fixed period and usually with a fixed interest rate that's lower than a credit card APR.

Depending on your credit score, you may qualify for a loan that covers your entire credit card debt. And if your debt is spread out across several cards, consolidating it into a personal loan will be easier to manage.

CNBC Select ranked Happy Money as one of the best options for a personal loan, with an APR of 11.72% to 24.67%. If you don't have a great credit history, applicants only need a fair credit score — 580 or above — to qualify for a loan.

Happy Money

  • Annual Percentage Rate (APR)

    11.72% - 17.99%

  • Loan purpose

    Debt consolidation/refinancing

  • Loan amounts

    $5,000 to $40,000

  • Terms

    2 to 5 years

  • Credit needed

    Fair/average, good

  • Origination fee

    0% to 5% (based on credit score and application)

  • Early payoff penalty

    None

  • Late fee

    5% of monthly payment amount or $15, whichever is greater (with 15-day grace period)

Terms apply.

An attractive option if you're trying to pay off high-interest credit cards, LightStream offers APRs as low as 7.49%. You will need a FICO credit score of at least 670, but LightStream doesn't charge late or origination fees.

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    7.49% - 25.99%* APR with AutoPay

  • Loan purpose

    Debt consolidation, home improvement, auto financing, medical expenses, and others

  • Loan amounts

    $5,000 to $100,000

  • Terms

    24 to 144 months* dependent on loan purpose

  • Credit needed

    Good

  • Origination fee

    None

  • Early payoff penalty

    None

  • Late fee

    None

Terms apply. *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.

Borrowing money from family or friends

If your credit score is below 580, you may have a hard time qualifying for a balance transfer card or personal loan.

If you're thinking of asking a family member or friend for a loan, make sure you set up a repayment plan before borrowing any money. And stick to it like you would a bank loan so you don't risk damaging your relationship.

Paying off high-interest debt first

If you have debt across multiple cards, it's a good idea to use the avalanche method — where you pay off the balance on the card with the highestinterest rate first, then work your way through the rest from highest to lowest APR.

You can also combine techniques by opening a balance transfer card with a 0% introductory APR. Polish off any lingering balances on your high-interest cards first and pay the minimum on your balance transfer card.

After the high-interest card is paid off, tackle your balance transfer card more aggressively.

Similarly, if you've consolidated debt with a personal loan or by borrowing from family or friends, prioritize paying off high-interest balances first.

Paying off the smallest balance first

Then, there's the snowball method of debt repayment, which involves paying off the card with the smallest balance first and working your way up.

The theory is that zeroing out a card balance provides a sense of accomplishment and encourages continued debt management. Financial advisors usually don't recommend the snowball method because it can result in more interest charges compared to paying off high-interest cards first.

At the end of the day, the most important thing is to create a debt repayment plan you can stick to. If paying off a card with a smaller balance in full will keep you on track in the long run, it may be the right choice for you.

If you decide to employ the snowball method, you should still makeminimum payments on your other cards.

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Bottom line

Credit cards are a necessity in today's world — and they can be an asset if you budget well and pay off your balance each month. If you find yourself buried under credit card debt, however, there are options that give you more time to pay it off with less interest.

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage ofcredit cards,bankingandmoney, and follow us onTikTok,Facebook,InstagramandTwitterto stay up to date.

Read more

What’s the difference between the ‘snowball’ and the ‘avalanche’ debt repayment methods?

The best debt relief companies to help you pay off debt

The best debt consolidation loans if you have bad credit

The 3 most common credit card payoff strategies

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

How to pay off credit card debt (2024)

FAQs

How to pay off credit card debt? ›

The snowball method is a debt-repayment strategy that focuses on paying down the account with the lowest balance first. As you direct your larger payments toward that balance, you continue to make the minimum payments on your other accounts so you don't end up paying late fees, hurting your credit or even defaulting.

What is the correct way to pay off a credit card? ›

The snowball method is a debt-repayment strategy that focuses on paying down the account with the lowest balance first. As you direct your larger payments toward that balance, you continue to make the minimum payments on your other accounts so you don't end up paying late fees, hurting your credit or even defaulting.

How do you clear credit card debt effectively? ›

10 Tips for Paying Off Credit Card Debt
  1. Set a Goal. Start by Setting a Goal You Can Achieve. ...
  2. Put Your Credit Cards on Ice. Yes, We Mean That Literally. ...
  3. Prioritize Your Debts. Credit Cards, Loans, Mortgages, etc. ...
  4. Trim Your Expenses. ...
  5. Create a Monthly Spending Plan. ...
  6. Use the Avalanche Method. ...
  7. Use the Snowball Method. ...
  8. Use Savings.
Mar 18, 2024

What are the 3 biggest strategies for paying down debt? ›

What's the best way to pay off debt?
  • The snowball method. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. ...
  • Debt avalanche. Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. ...
  • Debt consolidation.
Aug 8, 2023

How to pay off $8,000 in credit card debt fast? ›

To pay off $8,000 in credit card debt within 36 months, you will need to pay $290 per month, assuming an APR of 18%. You would incur $2,431 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

What is the best order to pay off credit card debt? ›

Pay off high-interest credit cards first

This is called the “debt avalanche method.” While some advocate for paying off your smallest debt first because it seems easier, you may save more on interest over time by chipping away at high-interest debt.

How long will it take to pay off $20000 in credit card debt? ›

It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

How can I pay off $5000 fast? ›

Credit card refinancing can help you pay off $5,000 in credit card debt much faster because a personal loan comes with a predetermined end date. Debt consolidation loans allow you to combine multiple debts into one loan. Some lenders will even send your loan funds directly to your former creditors.

How to pay off $1,000 dollars fast? ›

7 ways to pay off debt fast
  1. Pay more than the minimum payment every month. ...
  2. Tackle high-interest debts with the avalanche method. ...
  3. Set up a payment plan. ...
  4. Put extra money toward paying off your debts. ...
  5. Start a side hustle. ...
  6. Limit unnecessary spending. ...
  7. Don't let your debt hit collections.
May 9, 2023

How to clear credit card debt without affecting credit score? ›

How to Minimize the Impact Debt Consolidation Has on Your Credit
  1. Consider keeping old credit cards open. ...
  2. Pay off a balance transfer quickly. ...
  3. Avoid applying for multiple loans or credit cards. ...
  4. Pay on time.
Aug 15, 2023

What are four mistakes to avoid when paying down debt? ›

Mistakes to avoid when trying to get out of debt
  • Not changing your spending habits. If you're struggling to pay off debt, you probably need to change your spending habits. ...
  • Closing credit cards after paying them off. ...
  • Neglecting your emergency fund. ...
  • Getting discouraged. ...
  • Not getting help when you need it.

How can I pay off my debt smartly? ›

Here are five of the fastest ways to achieve debt freedom:
  1. Take advantage of debt relief services. ...
  2. Reduce interest where possible. ...
  3. Focus on your highest interest rate first. ...
  4. Take advantage of opportunities to earn extra income. ...
  5. Cut expenses where possible.
Mar 11, 2024

How do I get rid of $30 K in credit card debt? ›

How to Get Rid of $30k in Credit Card Debt
  1. Make a list of all your credit card debts.
  2. Make a budget.
  3. Create a strategy to pay down debt.
  4. Pay more than your minimum payment whenever possible.
  5. Set goals and timeline for repayment.
  6. Consolidate your debt.
  7. Implement a debt management plan.
Aug 4, 2023

How long to pay off $5,000 credit card with minimum payment? ›

During that time, you'll pay a total of $9,332.25 in interest for a total payoff cost of $14,332.25. 2.5% of the balance (inclusive of interest): It would take 505 months to get rid of your $5,000 credit card balance making just minimum payments at 2.5% of your balance. That's over four decades of payments.

Should I empty my savings to pay off credit card? ›

While you can tap into savings to pay your credit card bill—especially if you've got mounting credit card debt and a flush savings account—it's not something you should get into the habit of doing. Using savings to cover a credit card bill will have a negative impact on your savings goals.

How to pay off $15,000 in credit card debt? ›

Here are four ways you can pay off $15,000 in credit card debt quickly.
  1. Take advantage of debt relief programs.
  2. Use a home equity loan to cut the cost of interest.
  3. Use a 401k loan.
  4. Take advantage of balance transfer credit cards with promotional interest rates.
Nov 1, 2023

How to pay off $10,000 in credit card debt? ›

7 ways to pay off $10,000 in credit card debt
  1. Opt for debt relief. One powerful approach to managing and reducing your credit card debt is with the help of debt relief companies. ...
  2. Use the snowball or avalanche method. ...
  3. Find ways to increase your income. ...
  4. Cut unnecessary expenses. ...
  5. Seek credit counseling. ...
  6. Use financial windfalls.
Feb 15, 2024

Is it better to pay off one credit card or pay them all down? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

How to pay off $30,000 in credit card debt? ›

How to Get Rid of $30k in Credit Card Debt
  1. Make a list of all your credit card debts.
  2. Make a budget.
  3. Create a strategy to pay down debt.
  4. Pay more than your minimum payment whenever possible.
  5. Set goals and timeline for repayment.
  6. Consolidate your debt.
  7. Implement a debt management plan.
Aug 4, 2023

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