Published in: Credit Cards | Aug. 26, 2019

How to Lower Your Credit Card Payments

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Are your credit card payments too high? Here are some suggestions for reducing your debt.


Woman holding credit card is on phone while looking at her computer.

Image source: Getty Images

High credit card payments can be a major financial burden. You may feel you can’t afford to pay your monthly bill, or find paying a huge credit card bill is preventing you from accomplishing other important things with your money.

The good news is, you have options. There are a number of possible ways to lower your credit card payments, including:

  • Paying down your balance.
  • Transferring your balances to a new credit card with a 0% APR promotional to reduce interest costs.
  • Taking out a personal loan to consolidate debt and reduce interest.
  • Asking your current card issuer to reduce your interest rate.
  • Negotiating a debt settlement or payoff plan with your creditors.

The right approach will depend on your specific situation. Let’s take a closer look at each of these options so you can decide which would work best for you.

Reducing credit card bills by paying down your cards

Your credit card interest is calculated based on how much you owe -- so the larger your balance, the more interest you’ll pay. For most cards, your minimum monthly payment is also a percentage of your outstanding balance. That means if you can reduce the outstanding balance owed on your cards, you can reduce your required monthly bill, and lower your total interest cost.

To reduce what you owe, try paying extra toward your credit cards each month. You can use the debt snowball payoff method where you make extra payments to your smallest debt first, then move on to paying off your next smallest debt ASAP, and so on until all the debt is gone. Or, you can use the debt avalanche method and pay extra on your higher-interest debt first. 

To find extra cash to make these payments, try making a detailed budget that limits spending and prioritizes debt payoff. Put any extras, such as cash gifts or bonuses at work, right onto your cards so that you can pay them off ASAP. 

Reducing credit card bills with a balance transfer

It can take time to pay off your card balance, and for some people it isn’t feasible to make large extra payments. So, you may want to explore other options for lowering your credit card payments.

One of those options may be transferring your balance to a different credit card with a lower interest rate. If you can transfer your debt to a balance transfer card with a 0% promotional rate, you can reduce your interest to nothing for a set period of time. This can lower your monthly payments and total loan payoff cost.

Be aware, though, that 0% rates don’t stay in effect forever. Your rate will go back up when the promotional period expires. Try to pay off the debt in full before this happens, if you can. 

Reducing credit card bills using a debt consolidation loan

It’s often possible to reduce monthly payments on credit cards by using a personal loan to refinance the debt. If you have multiple credit cards, you could also use one personal loan to pay them all off, thereby consolidating your debt and ending up with just one monthly payment instead of several.

The interest rates on personal loans are often lower than what most credit cards charge. So, if you are able to qualify for a personal loan at a competitive rate, you could significantly reduce interest costs, monthly payments, and total repayment costs. You’ll also have a set payoff schedule with a personal loan, which means there will be a definite date by which you’ll be done with debt payments for good. 

Reducing credit card bills by negotiating your interest rate

Lowering your interest rate on your existing card can also reduce both monthly payments and total interest costs over the time you’re repaying your debt. 

Sometimes, this can be done with just a simple call to a credit card issuer. You can ask the credit card company you owe money to if they’re willing to reduce the interest rate you’re paying. They may just say yes -- especially if you let them know you’re considering switching to a different company’s credit card that’s offering you a reduced rate.

Reducing credit card bills through debt settlement

If your debt isn’t affordable, another option is to negotiate a settlement with your credit card company. This is really only an option if you are behind on payments and the creditor fears you’ll declare bankruptcy or stop paying at all. 

In this last-resort scenario, you can negotiate with the credit card company to have some of the debt forgiven. You’ll likely have better luck if you agree to make one lump sum payment, and pay it all off at once. But, you could also ask to be put on a payment plan that reduces interest and fees.

Companies don’t settle debt for people who are paying their bills on time though. This means your credit rating will be damaged by both your record of late payments and by the fact that the debt will be marked on your credit report as settled rather than paid in full. 

Think carefully about whether it’s worth taking this hit to your credit, and explore other alternatives before to settling your debt in this way. But, if you truly can’t afford your bills and can’t lower them by getting a balance transfer or debt consolidation loan, this may be your only choice. 

Which approach is best for you?

If you want to protect your credit rating and save the most money possible on monthly bills, paying off your debt ASAP is the best approach to lowering your credit card payments.

Both debt consolidation and balance transfers can help with the payoff process by lowering interest costs, and sometimes monthly bills. If none of these are viable options and your credit card balances have gotten too high for you to pay, you may need to consider debt settlement.

To decide what’s best for you, you’ll need to take into account your current financial situation, your credit score, the cash you have available to pay off your debt, and your goals for the future.

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