Debt sucks. There's really no other way to say it. That being said, it's important to prioritize paying it off. The good news is that if you have the right mindset and understand how to pay off credit card debt fast, you can totally do it.
However, to get in the right frame of mind, it's worth understanding why credit card debt is so bad.
Why credit card debt is bad
Having credit card debt that you are unable to pay in full each month can impact your financial goals.
The worst-case scenario is bankruptcy. However, even the smallest debt owed to your credit card issuers can limit your ability in terms of how much you save and in turn how much you are able to invest. This is because your money goes towards making credit payments each month.
If you are able to create a debt repayment plan and knock down your credit card balance fast, you can then apply the money toward your goals. This means saving and investing more and being able to achieve your financial goals quicker.
How to pay off credit card debt fast
Wondering how to pay off credit cards fast? Below is a list of 18 ways to rapidly knock down your credit cards (or other debt).
For the biggest impact, use a combination of these tips in your debt-repayment strategy. If you stay focused, in a few months you'll be surprised by the difference these small changes will make in paying off your credit card debt.
So here are our key tips on how to pay off your credit cards fast:
1. Stop all spending on credit
Once you decide you are done with debt, you need to be REALLY done with debt. This means using your debit card instead and no more spending on credit unless you have to make payments that require a credit card. And in that case, you should be paying off those charges in full each month.
Otherwise, grab your Ziploc, put in your credit cards, fill it with water, and throw it in the freezer!
Sometimes using your credit card is safer than using a debit card. Especially when it comes to online shopping fraud protection and travel protection. In this case, be sure you build that spending into your budget.
This approach is the fastest way to pay off credit card debt simply because when you stop increasing your debt, the only place for it to go is down.
2. Consolidate your debt into lower interest rate payments
A good idea might be to consolidate your debt into one monthly payment by transferring the balances from your different credit cards and loans to a new single credit agreement that has a 0% Annual Percentage Rate (APR) or very low introductory interest rate.
These lower interest rates will help you reduce the amount of interest you are paying back. Keep in mind a debt consolidation loan only makes sense if you can pay off your debt within the time frame of the low introductory rate.
3. Consider a balance transfer card
Part of your debt consolidation plan may be to apply for a new balance transfer credit card offering 0% interest. But often there is a balance transfer fee associated with the debt you're moving across to your new card issuer. After all, credit card companies want to make money off the deal.
If you want to know how to pay off credit card debt fast, then chances are you might be in a rush! But be sure to read the fine print very carefully so you understand exactly how your balance transfer card works.
You also want to make sure you have a good sense of how the interest is applied. Look out for higher interest rates kicking in once the intro period has expired.
4. Work out the fastest way to pay off credit card debt
It's all very well talking about the importance of paying down your debt fast. But how do you actually accomplish this? Two popular options are the debt avalanche and debt snowball strategies.
With the debt snowball method, you'll tackle your smallest balance first. As you eliminate one source of debt, you'll move your minimum payment plus any extra funds set aside for debt repayment across to tackle your next-smallest debt. Your snowball will keep growing as you tackle larger and larger debts until you're finally debt-free.
The debt avalanche method is focused on the interest rates attached to your debt. In this debt payoff plan, you'll start by paying off the loan or credit card debt with the highest rate, before moving on to the next highest interest rate. This has an avalanche effect on the remaining amount you owe.
Take a look at your individual debt pile, and work out whether the snowball or avalanche method will be the fastest way to pay off credit card debt in your situation.
5. Pay more than the minimum
Whether you have a personal loan, auto loan, or credit card, your lender will specify the minimum payment you must make each month. But this is often a very small amount.
Paying more than the minimum saves you money on monthly interest payments which in turn will help you pay off your balance faster.
Make it a goal of yours to pay as much as you can each month towards your credit card debt to reduce the amount of overall interest you'll be paying back to your creditors.
6. Use non-retirement or non-emergency savings
Got money sitting in a savings account earning little or no interest? You might want to consider using those funds to pay down your credit card debt.
Well, if you look at the big picture, you'll see that the interest you are paying on your credit card is not worth the pitiful interest rates you're earning on your savings account.
Once your debt is paid off, you can put the money you would have otherwise made on high-interest credit card payments towards savings.
Caveat: If the money you have set aside is your emergency fund, it's important not to touch this in case of an unexpected expense cropping up.
7. Sell stuff you no longer use
You can make some quick cash by getting rid of things you don't use. For instance electronics, clothing, shoes, and accessories you've never worn or no longer wear.
You can use online sites to make your sales like eBay, Facebook Marketplace, and Poshmark. Alternatively, check out your local consignment stores.
Tip: Price your items competitively and review the feedback of your potential buyers very carefully before you sell.
8. Start a side hustle
Are you good at a particular craft? Do people compliment you on your skills all the time? When it comes to how to pay off credit cards fast, maybe it's time you start charging for those skills by starting a side hustle to earn some extra income.
If you're a pro at baking, crafting, graphic design, etc. why not earn some money with your talents and apply it to your debt?
9. Get a part-time job
If running your own side hustle is not your cup of tea, consider getting a temporary part-time job until your debts are paid off. Be sure to remind yourself why you are working the extra hours - because you've been eager to learn how to pay off credit cards fast and get rid of your debt.
A work-from-home job could be a great way to earn some part-time income.
10. Cut cable
Cutting cable can also save you a lot of money each month. If you're not an avid sports fan, you might not miss cable at all. There are also tons of alternatives to cable.
Consider switching to an online streaming service like Netflix, Hulu, or Amazon Video (included with Amazon Prime) to save some extra cash until your debts are paid off.
11. Lower your cell phone plan
Cell phone plans can get crazy expensive especially when it comes to data. Try calling your service provider to see if there are any specials or offers they can give you for being a loyal customer. Otherwise, consider downgrading your plan to one that costs less.
12. Take lunch to work every day
Eating out every day adds up, especially if the average lunch is $10 to $15 dollars. Instead, plan your lunches for the week based on what you have at home.
Meal planning is a great way to get creative and reduce your food spending which can add up quickly. You can also, check out our 30-day meal planning challenge for some motivation!
13. Skip the movies and nights out for a couple of months
Movies and nights out also add up. Don't want to give up going out? Then skip the ridiculously priced popcorn and beverages at the movies and plan to skip the alcohol on nights out.
These items are heavily marked up and you can put that money towards your debt instead.
14. Carpool with co-workers
Do you have any co-workers that live close by? See if you can set up a carpool schedule to save money on the amount of gas you purchase each week and put those savings towards your debt.
15. Cut down on your grocery spending
Saving a few dollars off your grocery bill can go towards your debt repayment. Do you really need all those ice cream flavors?
Before you hit up the grocery shop, make sure you have a list and a full stomach, this way you don't get sidetracked by buying what you don't need or by wanting to buy something to eat right away while you are there.
16. Cancel unused memberships at the gym
If you barely go to the gym, why waste money on a subscription that you could use against your debt? Love working out? Try working out at home or outdoors and see how you feel!
There are so many amazing and free workout videos on YouTube. Plus apps like Nike Training Club and Nike Run Club offer free workouts as well!
17. Put any extra money you make like tax refunds and bonuses toward your debt
Those refunds and bonuses can make a huge impact on your debt. Have you been waiting all year to treat yourself? That's ok but think of how much happier you'll be with no debt. Plan to put most of that extra cash against your debt.
18. Contact a credit counseling service
If you're really struggling to get your debt under control, it may be worth speaking to professional credit counselors. Some may help you come up with strategies to pay down your debt faster.
Others may negotiate on your behalf with credit companies to get you a lower interest rate and make your situation more manageable. This can help prevent a debt settlement company from being called in, or the potential for bankruptcy.
Now you know how to pay off credit card debt fast!
Implementing one, some, or all of these 18 tips will definitely get you well on the way to paying off your credit card debt as soon as possible.
You might start out only being about to afford small amounts, but those amounts really do add up. Every single dollar you pay counts and will make a difference toward your debt repayment. Don't forget to build your repayment plans into your budget and track your progress.
Remember you are doing all of these things for a reason, and that is to get and stay debt free, so keep your focus on that - it will be well worth it in the end.