21 Ways To Pay Off Credit Card Debt Faster

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credit card debt payoffDo you have credit card debt or are looking for ways to slash your monthly payments?

Well, look no further. This article will show you the most effective credit card debt payoff tips you can use.

Credit cards are convenient. They save you the hassle of having to pull out cash every time you need to pay for something.

Plus, you don’t need to run to the nearest ATM machine because you’re short on cash.

Unfortunately, because of how easy they are to use, you can easily lose track of how much you spend. So, you can end up overspending.

As a result, the average American household has over $8,000 in credit card debt.  More importantly, over 40% of homes have some kind of credit card debt.

That’s a heavy burden on your family’s finances.

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Your Money Mindset

The very first step to getting out of credit card debt is to get the right money mindset.

Taking care of your finances when you’re in debt can be challenging. That’s because it poses a burden on your lifestyle. In addition, it puts extra stress on your relationships, work and everyday life.

This is why your perspective and how you think about debt is very important.

You have to put your debt front and center. By this, I mean make it a priority.

By paying off debt, you not only free up more of your monthly take home pay, you also lift the stress, fear and uncertainty that comes with holding those debts.

Both the financial and non-financial effect of knowing you owe someone and need to pay them back can hinder your freedom, happiness and ability to enjoy the life you want to live.

So, before going into the credit card payoff tips, I’ll take a brief moment to go through some important things that will help you get into the proper money mindset.

Why Paying Off Credit Card Debt is Important for You

Among the different types of debt, your credit card debt is one of the most dangerous. That’s because it produces more immediate effects. And, these effects are often more impactful to your finances.

Here’s why.

Reason #1: Minimum Amount Due

In your credit card statement, you’ll always see the term “Minimum Amount Due” or something similar. It’s usually in big, bold letters in areas you can’t miss.


Because your bank wants you to see it!

Yup, let me say it again. Your bank intentionally wants you to notice that label and the relatively smaller amount that comes with it.

Again, why?

That’s because if you pay in full, they don’t make any extra money. But, if you pay the minimum amount, you’ll be charged an interest rate, which is the APR on your card.

So, every time you don’t pay your credit card bill in full, you’re actually opening yourself up to new debt. In addition to the balance, every day you don’t pay that new debt, it increases because of the interest rate.

That means you can keep paying off your other loans. But, if you keep leaving a balance on your cards, you’re negating your efforts.

Reason #2: Interest Rate

The second part to that credit card debt is the interest rate. This is the APR (Annual Percentage Rate) that every card comes with.

It basically refers to how much interest you get charged for the balance you keep on your credit card.

What makes credit card debt dangerous is their high interest rates. That’s because:

The APR of your credit cards are higher that the interest rates of your other loans

If you take stock at all your debt and list them all down with their corresponding interest rates on a spreadsheet or piece of paper, you’ll see that the highest interest rates come with your credit cards. And, the difference is often very significant.

Here’s a rough guide on the average APR’s/interest rates different types of loans have.

  • Credit card APR: 14% to 25%
  • Student loan APR: Federal: 4% to 7%; Private Loans: 7% to 10%
  • Mortgage APR: 15 & 30 year average between 4% and 5%
  • Car Loan APR: 2% to 5%

NOTE: The APR’s above aren’t meant to be precise because they can’t be. They constantly change and depending on your credit score, history and other factors, they can vary significantly. Thus, the figures are there to show the point that average credit card APR is significantly higher than other common types of debt you’ll make.

Credit card APR’s can vary significantly

The second important point is that the range of credit card APR’s can vary significantly. The range above shows a 10+ percentage point spread. That makes a huge difference.

Just imagine if you have a $1,000 debt. In a year, that 10% difference is $100.

Depending on the issuer, the type of card, your credit score and current market interest rates this you may get a lower or much higher APR.

The introductory APR may be low. But, it is only temporary.

When you sign up for a credit card, you may see a very low number. That’s intentionally there to excite and entice you.

It’s called the Introductory APR. And, it will be significantly lower than the regular APR of the card. This is like an introductory promo the card companies use to lure customers.

In fact, you’ll see some credit cards with 0% APR, which is great.

As such, it’s important to check 2 things when you’re choosing a credit card:

  • What the regular APR (or interest rate) is. If the regular APR is very high, you be may in for a rude surprise once the initial promo period is over.
  • How long is the introductory period? This can vary. And, you can use it to your advantage. But, once the introductory period is over, the APR will revert to the regular interest rate (APR).

One way to take advantage of 0% APR is it allows you to do a balance transfer, which can make sense in some situations. This lets you get reprieve from another card you have that has a higher interest rate. In addition, the introductory 0% APR or lower APR duration gives you a grace period to quickly pay off that debt balance.

Reason #3: Revolving Debt

Credit cards are what we call revolving debt. That is, you have a balance you can keep drawing on as long as you pay back some amount. This is why you can keep using your credit card as long as you don’t max out.

Common types of revolving debt are credit and debit cards as well as home equity lines of credit.

In contrast, installment debt are loans with a fixed amount that doesn’t change. It also has fixed payments you need to meet at certain times. Once the amount ifs paid off the debt is finished. You can’t draw on the loan anymore. If you want more money, you’ll need to apply for another one.

Common types of installment debt are student loans and mortgages.

So why bother?

  • That’s because revolving debt means you never run out of it. So, there’s the danger of you relying on it so much. And, if it takes you long to pay the remaining balance, the interest rates can add up costing you a lot of money.
  • There’s also the issue of credit utilization. Credit utilization is how much of your total credit limit you’re using. For example, you have a total balance of $600 in all your cards. And, the total credit limit of all your cards is $2,000. That manes $600/$2,000 = 30%. Keeping a high credit utilization hurts your credit score.

Reason #4: Credit Score

That brings us to your credit score. Not using your credit card wisely, can be bad for your credit score. This in turn can impact how well you’re able to borrow money, how much you can borrow, and what interest rates your loans will have.

Here’s a quick list of things that credit score affects.

  • It affects how you borrow money. Whether your loan gets approved or not, how much lenders are willing to risk on you and what interest rates you get. Lower credit scores negatively affect all these factors.
  • Better financial deals.
  • It affects your insurance premiums.
  • Some employers check your credit as well.

Reason #5: Other Fees

Any time you get a new card, make sure you read its Terms & Conditions very well. Read it a few times if needed and take notes.

You can staple or clip your notes with the initial “Congratulations” letter they send you for becoming a card holder.

One section to make sure your read are all the extra fees. One fee that’s sure to be there is the Late Fees. This is an amount charged to you when you don’t pay the minimum amount by the due date.

In addition, there is the Penalty APR, where the card company can increase your rate when you don’t pay in time.

Reason #6: Cash Advances

In addition to credit card debt, many banks also offer cash advance features with your card. This is a great feature if you’re in a bind and need quick cash you may not currently have.

But beware, the APR or interest rate that comes with cash advances is very high.

Additionally, the moment you take out the cash advance, it automatically starts accruing (earning) interest. So, you don’t have any grace period, unlike the 30 days or so you get before your credit card bill for the month is due.

This puts you at a disadvantage from the get go as far as managing your debt goes.

Figure Out How Much Credit Card Debt Do You Have

Now that we know why paying off your credit card debt is important, it’s time to assess your current situation.

The most effective way of doing this is by using a spreadsheet. You can likewise use paper, although adding items and removing them can be more problematic with that method.

Here, start by listing down each item as a column.

  • Column A: all your credit cards (name them)
  • Column B: the credit limit of each card
  • Column C: its interest rate (APR)
  • Column D: how much debt you have on that card (outstanding balance)

Using a spreadsheet makes it easy to sum up all the debt.

This will give you a good idea of how much you owe in total. And, also how much you owe for each card.

You’ll use this later in the debt payment plan below.

Set a Goal

What’s your goal?

Now, it’s easy to say “pay off debt”.

But, what’s really behind the reason you want to pay off your credit card debt now.

In short, what’s your WHY?

Answering the question, “why do you want to pay off the debt?” will help you have a bigger, more important goal to shoot after. It also helps motivate you.

Here are some examples of goals people can have for paying off debt.

  • To start saving for retirement
  • Save for a vacation,
  • Build up your kids’ college fund

When thinking of your goals, make sure they’re realistic. Don’t go crazy and say I want to be a billionaire or want to buy a $10 million dollar house.

Well, those goal may be realistic in some cases. But, the point is, make sure that your goals are something practical and not a shot at the moon.

One way to keep yourself in check is to use the S.M.A.R.T. method. That is, your goal should be.

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time bound

Make Paying Off Your Debts a Priority

With paying off debt, it’s important to have urgency. The reason is, each day that goes by, the total debt you need to pay goes up.

Remember the interest rates?

They don’t take vacations. They don’t take weekends off.

This means each day that passes, extra interest is added to your balance. This:

  • Increases the total debt you need to pay over time
  • It also accelerates the amount your debt increases by. That’s because the interest earned today is added to your current balance. As the balance gets bigger, the resulting daily interest also increases.

So, the sooner you pay off the debt, the less money you end up paying.

Here’s how.

Step 1: Prioritize Debt Payment Before Spending on Things You Want

This takes disciple, sacrifice and consistency. But, you can do it!

Instead of splurging on shoes or clothes, use the extra cash to pay more towards your credit card debt. Try doing this with any free or extra cash that comes around, including IRS refunds, bonuses or promotions.

The key is to stay motivated.

And remember, this sacrifice is only temporary. But, it will help you live a debt-free life.

Once you’re done paying off your credit card debt, you’ll have a lot of extra money on hand. That’s because the money you used towards paying off debt can now be allocated for something else.

Step 2: Prioritize Your Debts

If you have credit card debt, chances are you have other debt as well. Thus, It is important to know which debt you should prioritize first.

Here’s how.

  1. List all your debt. This gives you better perspective on what you owe, the types of debt you have, how much you owe for each and the interest rates they charge.
  2. Understand revolving vs. installment debt.  Revolving debt like credit and debit cards affect your credit score more than installment debt. So, you need to take care of them before they hurt your credit.
  3. The total amount you owe for each. Note down the biggest loans. The reason the biggest is important is because total interest accrued (accumulated) on a daily basis equals your balance multiplied by the interest rate. So, a high balance and/or interest rate means a larger interest cost to you. This makes big debt amounts increase faster.
  4. The interest expenses added to each. This is how much interest is added onto to your debt on a daily basis. For example, your credit card has a 24% APR and you owe $2,000. To simplify things, that means leaving the $2,000 balance for a year on that card adds $2,000 x 0.24 = $480 to your debt. At the end of 12 months, your $2,000 debt is now $2,480, without anything else happening. That means you need to pay more money for the original $2,000 debt you owed.

From here you’ll be able to decide which debt to pay off first to give you most cash flow relief. We go more in depth in the debt payment plans below.

Ways To Pay Off Credit Card Debt Faster

In this section we look at how to pay of credit card debt fast. Once you have the proper mindset and are prepared to take on your debt, it’s time to implement some or all of these tips.

Stash Away Your Credit Cards, But Don’t Cancel Them

The easiest way to stop incurring new credit card debt is to stop using them. The best way I’ve found to do this is to store them in your desk behind lock and key.

Don’t cancel them. That’s going to hurt your credit score.

Just keep them out of sight. That way you won’t get tempted to use them.

Instead of using your credit card, pay in cash. This lets you track your expenses better.

Each time you need more money, you’ll need to visit the ATM to withdraw. This gives you a receipt for the date and amount you took out. It will also show in your bank statement.

Additionally, when you have the proper money mindset, you’ll feel the psychological sting of paying with cash. Seeing money leave your hands each time when you buy something will remind you of your debt payoff plan and ultimate goal.

Lastly, when paying with cash there’s no risk of added interest.

Start Paying More than the Minimum Required

Credit card companies like enticing you to pay the minimum balance.


Because when you do, they make money. They get to charge an interest for any amount of the full bill that isn’t paid each month.

That’s why the minimum balance payment amount is always very visible. They WANT YOU TO SEE IT!

In fact, credit card companies like customers that don’t pay the entire amount more than they like those who do. That’s why the in the industry, people who always pay their entire credit card bill are called “freeloaders”.

Yup! Freeloaders.

That’s because they “freeload” on their cards. They essentially get the free 30 day grace period before having to pay their credit card balance without having to pay any interest.

By paying the entire amount, you save yourself the added interest cost.

If You Can, Make Extra Payments

Making extra payments speeds your credit card payoff.  The faster the balance goes down, the smaller the additional interest that’s tacked on day after day.

This gives you twice the reprieve. One for the total amount of debt. Second, it reduces the extra interest that’s added to your balance on a daily basis.

Another advantage of making extra payments each month on the amount you owe is it lowers your credit utilization ratio.

Basically, your credit utilization ratio is percent of your total available credit limit you’re currently using.

For example, you currently have 2 credit cards. One has a debt of $500. The other with debt of $750. This means your total balance (or debt) is $1,250.

If your credit limit for card 1 is $5,000 and card 2 is $3,000 your total credit limit equals $8,000.

This means, your current credit utilization ratio or credit utilization rate is $1,250/$8,000 = 0.15625 x 100 = 15.6%

Ideally, a good credit utilization ratio is one that’s 30% or lower.

Try a Debt Repayment Method that Works for You

When it’s time to pay off debt, there are 2 very effective ways of doing so. They are the debt snowball method and the debt avalanche method.

Both work very well. So, it really depends on you which fits your style better.

Debt Snowball Method

This method focuses on paying off the smallest debt first. It doesn’t take into consideration the interest rates of your loans. The only thing that matters is which is the smallest balance.

The goal is to pay the smallest balance first. When that’s done, move to the next smallest balance. Keep doing so until all your debt is gone.

Here’s a quick overview of the steps

  1. List then arrange all your credit card debt. Put them in order of smallest balance to biggest balance.
  2. Pay as much as you can to the smallest balance. The goal is to pay off that debt as soon as you can.
  3. For the rest, pay the minimum amount needed.
  4. Once the smallest balance is fully paid off, do the same of the next smallest balance debt.

By using the money that’s freed up from the paid off debt, you’re essentially letting the extra cash snowball into a bigger amount to take on the larger debt balances.

Debt Avalanche

The debt avalanche method is different. Here, you focus on the debt with the highest interest rate. Because it has the highest interest rate, it has the ability to do the worst damage.

The higher interest rate means each day you let it linger adds a bigger interest cost to your current balance. Thus, tackling it first saves you more money in the long run.

Here’s how to do it.

  1. List and arrange all your credit card debt. This time, order them from highest interest rate to lowest interest rate.
  2. Pay as much as you can on the debt with the highest interest rate.
  3. For the others, pay the minimum needed.
  4. When the highest interest rate debt it completely paid in full, move to the debt with the next highest interest rate.
  5. Keep doing so until all your debt is gone.
Which One is Better?

The million dollar question is, which debt payoff plan is better?

Technically, the debt avalanche is better. Math will show you that you end up paying less in total to get rid of all the debt. This works because you’re cutting off the highest interest rate earlier.

But, because of human nature, studies show that the debt snowball produces better success rates.

We, as people, like seeing results. Thanks to the internet, we’ve become addicted to instant gratification.

And, when it comes to faster results, you’ll see them with the debt snowball method. Since the smallest balance can be paid off quickly, it allows you to experience “quick wins”. Thus, it makes you feel better. And, each time you pay off a debt in full, you’re also more motivated to keep going.

In contrast, the highest interest rate may be a larger loan. So, it will take longer. Thus, you don’t get your quick win.

As a result, research shows that people are able to stick with their debt payoff better when they take out the smaller debts one at a time.

Track Your Expenses

Keeping track of all your expenses is a great way to make sure you’re not spending money on unnecessary things. In addition, it also lets you keep track of how much you’re spending each month.

This allows you to get an idea of whether you should be cutting your expenses. And, which ones to consider.

The best way to do this is to collect all your bills. This includes utility bills, subscription and receipts. You may also want to refer to your credit card statement so see what purchases you regularly make.

Finally, take out your bank statements and see how often you withdraw and how much you do each time.

Get a Side Hustle

Increasing your income is by far the simplest way to pay off debt faster. But, it’s not always the easiest to do. This is why most people have better success at cutting expenses.

Making more money requires time. So, you do need to sacrifice, at least temporarily.

The good news is, earning money today is much easier that it was a few decades ago. There are more opportunities, especially online. And, you can start your own business without ever leaving your home.

Here are some amazing side hustles that let you work at home while having a full-time job.

  • Blogging
  • Virtual assistant
  • Freelancing (writing, proofreading, copywriting, graphic design)
  • Make money filling out surveys
  • Sell stuff creative stuff, services, products
  • Small gigs
  • Online tutoring
  • Teach people English

Learn to Create a Budget That Works for You

Whether or not you’re in debt, having a budget is essential. This lets you know exactly:

  • How much money is coming in from all your income sources
  • How much money you’re spending each month
  • What amount goes to paying for debt and interest on those debts

The key to making your budget are:

  • Try to as detailed and specific as possible. When you can break things down, do so. Grouping everything into one item may make it easy initially, but you’ll hate updating your budget later on.
  • Be as complete as possible. Try to cover everything as thorough as possible. For your expenses, keeping all your receipts or noting them in an budget app or spreadsheet so you don’t forget really helps.
  • Be realistic. Don’t make a budget that you won’t be able to follow. It should be something achievable. And, just as importantly, not too stringent that it makes you miserable or “hate your life”. That will tempt you to “cheat” or be inconsistent with it.

Finally, always keep in mind that your goal when making a budget are:

  • Get the balance to zero. That is, the total income or earnings should be at least equal to your total expenses plus debt payments. If it’s negative, keep slashing expenses. If it’s positive, use the extra cash to pay off debt faster. Later on, when you have no more debt, use this extra cash to put into savings.
  • Keep adjusting until you get to zero or a positive number. Your budget is not a one and done thing. So, don’t be afraid if your first total shows more expenses than earnings. It just means you need to cut more expenses. Keep doing so (iterating) until you get the total income minus expenses and debt payments equals zero.
  • Always update your budget for the next month. The reason you want to keep your budget organized is because it makes it easy to update next month. This lets you add or deduct expenses and income, whichever the case may be.

Slash Your Expenses

One of the major groups in your budget are your expenses. On a month to month basis, your two biggest costs are your expenses and debt payments.

More importantly, by cutting down on your expenses, you’ll be able to free up some money to use to pay off debt. This lets you slash the total amount you owe faster.

Because you’ve already created your budget, it’s fairly easy to see where you’re spending the most. This will let you focus on the items that will let you be able to free up the most cash to use for paying off debt.

Stick to a Monthly Spending Plan

The reason creating a budget is very important is because it lets you lay out all your cash inflows and outflows.

This lets you see everything under a microscope. By that, I mean you’ll be able to see:

  • Which are the big spending items
  • What are small items that add up to big amounts
  • Which items are not necessary you can do without
  • What are the expenses you need to get rid of but have a hard time doing so

All these things are easily noticeable when you have your budget listed out with the corresponding amounts next to each item.

Doing so lets you build a spending routine. You’ll also more or less know how much you spend for groceries, gasoline, electricity and water.

When all of these are steady or stay consistent month in and month out, you’ll be able to estimate ahead of time what part of your earnings you can allocate for paying off debt.

Monitor Your Progress

With the debt payment plans above, you’ll have a spreadsheet or notebook where all your debt is listed down. This makes it easy to keep track of them.

Ideally, you should see the balances and the total of your debt go down. Depending on which method you go with, you should be able to monitor whether or not that item you’re paying off is getting smaller.

In general, here are a few things you should notice:

  • The current debt/loan you’re trying to pay off should get closer to 0 with each month
  • Your total balance for all the loans (sum of all your debt) should also be going down
  • Over time, there should be fewer debt entries on the list. That is, the number of debt should slowly decrease until there are no more rows left in the list.

It’s also a good idea to note when you started paying off a certain debt or loan. This lets you see how well you’re doing. And, if you should speed up the rate of payment or not.

Stay Motivated

Paying off debt often takes time. Part of the challenge is staying motivated. This can be hard if you have considerable debt to slash.

This is why it’s important to have the right mindset. And, over time, develop money saving and debt paying habits. This way, you’ll expend less effort in trying to keep motivating yourself because they’ve become rituals you’re used to doing.

Sell Things That You Don’t Use or Need Anymore

This lets you earn extra cash fairly quickly. Although it’s not going to be recurring, it will be able to help you pay off some of your credit card balance.

I remember clearing out my closet and storage only to find so many things I didn’t need anymore. What’s great is you can easily sell them online. Places like eBay, Craigslist and Facebook yard sale groups let you find buyers fairly easily.

Similarly, you can do a garage sale or go to a consignment shop if you want to go the old fashion route.

Find a Part Time Job

If your job lets you leave at 5:00 pm, this gives you the ability to use the remaining time to find part time work elsewhere. Another option would be to ask if your employer offers overtime. This lets you work more hours to take home more cash.

With part-time work, it’s important to find flexible jobs as well as those that let you work on weekends. This makes it easier to work its schedule around your main employment.

Negotiate Your Rates

Always ask your lender, utility company and credit card if they can offer you lower rates. One thing not many people know is that debt and other bills can be negotiated.

This lets you renegotiate your current rates and try to get a lower one. In doing so, it can help you save money to pay off debt quicker.

In addition to your credit card and other loans, you can negotiate your utility bills as well cable and other subscription services.

Transfer Your Card Balance

We spoke a bit about transferring your balance to a lower interest rate credit card. This works well especially if you can find credit cards that offer 0% APR.

The very low APR is typically offered as an introductory promotion. That means it’s temporary. After a certain number of months, the new card’s APR reverts to its regular APR, which much higher than the introductory rate.

So, make sure to check how long the 0% APR period is and how much the regular interest rate is.

You can take advantage of this time to pay off your credit card balance without being charged interest. This grace period effectively buys you time to pay things off faster.

Try Consolidating Your Debt

In simple terms, debt consolidation is putting all your debt together. But, to make it advantageous to you, here’s what to do.

  1. List all the high interest rate balances
  2. Consolidate them (group them) into one with a lower interest rate

So, you end up with one card that doesn’t charge you as much interest on the balance you owe. That’s instant savings.

Use Any Extra Cash That Comes Your Way to Pay Off Credit Card Debt

The reason I spent some time explaining why credit card debt is more dangerous than other debt above is because it lets you prioritize on it first.

Since credit cards cost you more due to their higher interest rates and affect your credit score, focus on paying them off first.

So, whenever you receive bonuses, tax refunds or promotions, it’s a good idea to use those extra funds to pay off your credit card. This lets you get rid of that debt faster.

Cut Back on Costly Habits and Vices

Vices are things you should try and quit. So, even if you’re not trying to save extra cash to pay off credit card debt, it’s a good idea to try and gradually stop. Things like smoking and drinking too much are often on top of the list.

Then, there are our habits. These aren’t necessarily bad. But, they can be costly. These are slightly different from temptations (which is the next item on the list) because habits are ingrained into our daily lives.

Things like that $3.00 cup of coffee in the morning or daily lunches with co-workers at restaurants. All of these things add up. Just think about it.

If you buy one cup of coffee every morning, that’s $3.00 multiplied by about 260 working days in a year. In total, that’s $780!

Make a List of Your Biggest Temptations and Post Them on Your Fridge

Everyone’s got their temptations. When it comes to spending, you may like eating out, taking vacations, going to the spa, buying new shoes or clothes.

Whatever they are, you may want to limit or control them for the meantime. This will help you pay off debt faster.

One way to make them easy to remember is to stick them where you can always see them. The fridge is a good place for me.

I always visit the fridge in the morning when I prepare breakfast. So, putting a sticky note of my reminders and things to avoid always keeps me focused.

Over to You

Credit card debt is burdensome. What’s worse is that it keeps adding up over time if you don’t get rid of it. Hopefully, the tips above will help you pay off all your credit card debt, so you don’t have to be burdened by them.

Before you go, I’d love to hear what your favorite credit card debt payoff tips are. Leave them in the comments section below.


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