How to Pay Off Credit Card Debt Fast

I know first-hand how financially and emotionally draining credit card debt can be.

The interest rates on credit cards are insanely high, making it hard to make real progress paying while it off. But they are also all kinds of crazy feelings that credit card debt brings up.

Guilt from having gotten yourself into debt.

Resentment at whatever outside factors led to you going into debt.

Fear that you’ll never pay off the debt.

Trust me, I’ve been there and I’ve felt all of those feelings. But I’ve also learned how to overcome the roadblocks that keep us in debt, and so in this article, I’m teaching you how to finally pay off your credit card debt and how to do it fast.

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Pay more than the minimum payment

Have you ever rationalized paying just the minimum payment on your credit card because that’s all you “had to” pay? Or told yourself it wasn’t a big deal because it was such a small amount every month?

Credit card debt can be deceiving. It seems like it’s not a big problem because the monthly payments are so low.

But here’s the catch — the minimum payments are low because credit card companies want you to stay in debt.

Every month that you don’t pay off your balance in full, they get to charge you interest. That’s how they keep making money off you.

I’m going to let you in on an eye-opening fact.

If you have $5,000 in credit card debt with a 22% interest rate (fairly standard for millennials) — you wanna know how long it’s going to take you to pay it off?

23 years.

Yes, you read that right. $5,000 will take you just over 23 years to pay off. And the even scarier number?

You’ll pay over $8,500 in interest.

Now that you understand how important it is to get this debt paid off fast, you’re ready to dive into the rest of the tips.

Focus on one debt at a time

When I get new clients that have credit card debt, they’ve usually tried to tackle their credit card debt before. They know they need to make more than the minimum payment, so they pay a little extra to each card every month.

Here’s the problem with that strategy: you’re paying each card off slightly faster than you would have, but aren’t really gaining any momentum.

Rather than spreading your extra cash over all of your debts, focus on one and go all in.

Now you might be asking yourself — how do you decide which debt to focus on first?

DEBT SNOWBALL VS. DEBT AVALANCHE

The two most popular debt payoff methods are the debt snowball and the debt avalanche.

Debt snowball

With the debt snowball, you make the minimum payment on all of your debts except the one with the smallest balance. You put any extra money each month toward that debt.

Once you pay off the smallest debt, you take all the money you were putting toward it and instead put it toward your next smallest debt. Do that until you’ve snowballed into one giant monthly payment you can pay toward your biggest debt

Debt avalanche

The debt avalanche is similar to the debt snowball. But instead of paying off your debts smallest to largest, you first focus on the debt with the highest interest rate and slowly work your way toward the small interest rate.

While the debt snowball gives you emotional victories when you pay off your smallest debts, the debt avalanche will actually save you the most money, since you’re tackling that high interest first.

Use a balance transfer to lower your interest

I’m going to be upfront and tell you that there are some mixed reviews in the personal finance world when it comes to balance transfers. Let me tell you where I stand.

I’m a huge fan of balance transfers.

A balance transfer is when you open a new credit card and then transfer the balance of an old credit card to the new one.

These are a useful tool because when you open a new card, you typically get 12-18 months interest-free. This can help you to pay off your credit card debt much faster.

The reason that some personal finance experts recommend against balance transfers is that they act as an enabler. People transfer their balance, but then continue making the minimum payment.

With my money coaching clients, that’s simply not allowed. We use these cards as a tool to help you pay off your debt way faster because your money isn’t going toward interest.

If you’re going to use a balance transfer card, you have to commit. Commit to making more than the minimum payment so you can pay the card off before the interest kicks in.

Interested in learning more? I have an entire guide about balance transfers and how to do one. Additionally, here are my favorite balance transfer cards for paying off credit card debt:

Chase Freedom Unlimited: This is hands-down my favorite all-purpose credit card. It comes with higher cash back than you’ll find on many other cards, along with extra rewards on bonus categories. Plus, it offers 0% for 15 months on balance transfers.
Capital One Quicksilver: This was my very first credit card, and it’s one I still have in my wallet. In addition to the cash back rewards it offers, you’ll get 0% for 15 months on all balance transfers.
Discover It Cash Back: This card is another one I’ve had for years, and it offers elevated cash back on certain bonus categories. Plus, you’ll get 0% for 14 months on all balance transfers.

Try a debt consolidation loan

A debt consolidation loan is when you borrow money from a financial institution (typically in the form of a personal loan) to pay off your credit cards. Then, rather than making several monthly payments to several credit cards, you have just one monthly payment.

I think debt consolidation loans can be a useful tool for people who have a lot of credit card debt and either can’t get a balance transfer card big enough to pay it all off or who know they won’t be able to pay the debt off within the next year or two.

Debt consolidation loans come with fairly high interest rates, so they aren’t my first choice. But if a balance transfer card doesn’t work for your situation, then this type of loan can help you save money and pay your debt off faster.

Figure out where you can cut costs

I’ve got some news that you probably aren’t going to like. Finding the right tools, like balance transfer cards and debt consolidation loans, isn’t going to get your credit card debt paid off.

What’s actually going to do the trick is putting more money toward your debt. And in most cases, that requires cutting back on some expenses.

You might think you’ve done everything you can to cut back and that there’s nowhere else that you can save. And that might be mostly true, but here are a few other ideas to consider:

Start a budget. Far too many people don’t have a budget to help them organize their money. If you don’t have one, start one. If you do have one, review it and see where you’re spending a lot of money that you could spend less.
Negotiate your bills. For most of us, it doesn’t occur to us to negotiate our monthly bills. But you totally can! And better yet, an app like Trim can do it on your behalf.
Use cash-back apps. There are plenty of apps out there that give you cash back for purchases you make online and in-store. My favorites are Rakuten for online purchases and Ibotta and Fetch Rewards for in-store purchases.

Increase your income

There are only two ways to make more room in your budget: cut your expenses or increase your income. And you and I both know we can only cut our expenses so much. But there’s no cap on how much you can earn.

There are so many ways to increase your income. Some of my favorites include:

Become a freelancer. While working full-time, I was also making thousands of dollars per month as a freelance writer. It finally allowed me to quit my job, and I still freelance write alongside my money coaching business. You can freelance doing just about any type of job!
Join the gig economy. Apps like Uber, Doordash, Rover, etc. allow you to perform tasks for other people and get paid. You can do it whenever you have time in your schedule.
Get a second job. When Brandon and I were saving for our RV, he worked a few nights per week as a bartender after working at his full-time job. He was able to save a ton during that time!

Check out lots of more ideas on how to make an extra $1,000 per month.

What to do after you pay off your debt

Up until now, we’ve been talking about how to pay off credit card debt. But what happens when you’ve paid it all off?

I’d love to tell you that you’re home free, but that’s not necessarily the case. Many people pay off their credit card debt, only to get themselves right back in it. And on top of that, there’s some bad advice out there about credit cards, so I want to set the records straight.

KEEP YOUR CREDIT CARDS

If you follow Dave Ramsey, he’s going to tell you to cut up your credit cards and close your accounts. He’ll try to convince you that’s the only way to be financially free.

He’s wrong.

We’ll talk more about how (and why) you can use credit cards responsibly, but right now, I’m just going to tell you to keep the accounts open.

Your credit score is based on a handful of factors, including your credit utilization and your age of credit. By closing your credit accounts, you’re getting rid of your available credit (aka screwing up your credit utilization). You’re also destroying your age of credit.

Both of these things can lower your credit score. And if you ever plan to get a loan, a credit card, an apartment, etc., you’ll need your credit score.

It’s easy for Dave Ramsey to tell you that you don’t need a credit score because you should buy everything in cash. Dave Ramsey is rich and can buy everything in cash. If you’re not likewise rich, this is bad advice.

CONFRONT THE ISSUES THAT GOT YOU INTO CREDIT CARD DEBT

There are many reasons people get into credit card debt. Maybe a financial emergency popped up, like unforeseen car repairs or medical bills. Or maybe you have a problem with impulse spending or emotional shopping.

In my case, it was a couple of factors. I had just gotten divorced, and my ex-husband got basically all the money and stuff. He also made more money than I did. I had to charge a lot on credit cards to get a new apartment and buy new stuff.

But I also struggled with emotional spending. While we were still married, I would shop to avoid being at home. And after the divorce, I would shop to distract myself from the anxiety I was feeling.

Now, it’s unlikely I will find myself in that situation again. My current marriage is pretty freaking awesome. But now I know I need to be more prepared for financial emergencies, so I keep a large emergency fund.

The emotional shopping was a little different. I couldn’t just pay off the debt and ignore the problem. Otherwise, it would have kept happening over and over again.

Instead, I had to find a way to deal with my emotions other than shopping.

Really try to get to the core of why you got into credit card debt. Once you know that, you can put safety nets in place to make sure it doesn’t happen again.

USE CREDIT CARDS TO YOUR ADVANTAGE

I think credit cards are awesome for so many reasons. First, I love that using a credit card builds my credit score. And having a good credit score allows me to get better deals on loans.

I also love credit card rewards. My husband and I use both cashback and travel rewards cards. We have a strategy behind how we use them, and we love getting a little free money in our bank account or saving money on travel.

Finally, I love the perks that come with credit cards. They include:

Fraud protection. If someone uses your credit card, you can dispute the charge, and your credit card company won’t make you pay it. This also works if you genuinely buy something but then the seller doesn’t deliver on a promise.
Free credit monitoring. Credit card companies keep you up-to-date on your credit score and let you know if anything new was added to your credit report.
Random discounts. Depending on what credit card you use, there’s a chance the company may partner with other companies to get you discounts on random stuff.

HOW TO USE CREDIT CARDS RESPONSIBLY

You know that you should use credit cards responsibly, but you’re probably wondering what that actually looks like.

Only spend money you already have. People tend to get into a cycle where they put everything on a credit and then pay it off the following month. The problem is that they’re usually using next month’s income to pay this month’s bills. Instead, only spend money that’s actually in your checking account already.
Stay below 30% of your credit limit. Your credit utilization is a big part of determining your credit score. If you use more than 30% of your credit limit, it’ll negatively impact your score.
Pay your balance in full every month. Never carry a balance over. There are myths out there that it only boosts your credit score if you carry a balance. This is incorrect.

Final Thoughts

When you’re stuck in credit card debt, it feels like you’ll never get out. But I promise you, that’s not true. Using the tips in this post, you can start making major progress on paying off your credit card debt.

Erin Gobler