Credit cards can be a useful financial tool. But credit card debt is often bad news. Owing money on a credit card doesn't make you financially irresponsible. But if you're in this situation, you'll want to get rid of that credit card debt as quickly as possible. Here's how to pay off a credit card fast.
Why it's important to pay off a credit card quickly
The longer you have an outstanding balance on a credit card, the more interest you'll rack up on your debt, making it cost more. If your credit card has a high interest rate attached to it, then it's even more important to try to pay off your balance as soon as you can. You can use this credit card interest calculator to see how much interest your balance may be costing you.
Paying off a credit card fast can also help your credit score improve. One factor that goes into calculating your score is your credit utilization ratio, which measures the amount of available revolving credit you're using at once. Even if you make your minimum payment on time every month, your credit score could go down if you carry too high a balance.
How to find more money to pay off a credit card
To pay off a credit card fast, you'll need extra money to put toward your debt. To that end, here are several steps you can take to get your hands on more cash.
Rework your budget
You may already be living pretty frugally and spending money mostly on essential expenses, like rent, food, and transportation. But if there's any wiggle room at all in your budget, it pays to cut back in those spending categories that allow for it.
Get a roommate
Housing may be the largest expense you grapple with every month. If it's possible to lower that expense by splitting your rental costs with a roommate, it'll help free up cash to put toward your credit card debt.
Get a side job
If you're already spending minimally and can't do anything to reduce your housing costs, getting a second job could help you get more money to put toward your credit card debt. Even if you only have time to work a few extra hours each week, earning more money could help you make a dent in your credit card balance.
How to pay off credit card debt strategically
If you've managed to scrounge up some extra money to pay off your debt, you can use a debt payoff strategy to tackle it instead of (or along with) debt consolidation, which we'll cover in a minute.
Here are two ways to pay down your debt:
- Snowball method: You pay off your debts in the order of smallest balance to largest balance, regardless of interest rate.
- Avalanche method: You pay off your balances in order of highest interest rate to lowest interest rate.
There are pros and cons to each approach, but if your goal is to shed your debt quickly, you may want to also consider consolidating your debt.
RELATED: Check out The Ascent's debt snowball calculator to see which debts you should pay off first when using this method.
MORE INFO: See The Ascent's complete comparison of debt snowball vs. debt avalanche.
The most efficient ways to pay off credit card debt
If you owe money on multiple credit cards, debt consolidation could be your ticket to paying it off faster. There are several ways you can consolidate credit card debt.
A balance transfer
With a balance transfer, you move your existing credit card balances onto a new balance transfer credit card and then pay off that single card every month. Often, balance transfer credit cards come with a lower interest rate than what your current credit cards are charging you. And many balance transfer cards come with a 0% introductory APR, where you pay no interest at all for a limited period of time.
Now to qualify for a balance transfer offer, you'll need to have a good credit score. If you don't, this may not be an option.
Also, even if you get a balance transfer card with a 0% introductory APR, you may not manage to pay off your entire balance by the time interest starts accruing. Plus, some balance transfer cards charge a fee for moving over your credit card debt. Read the fine print on your balance transfer agreement to make sure a balance transfer really makes sense, especially if you're not sure you can pay off your balance by the time your introductory period ends.
Though balance transfers have their drawbacks, it's an option worth looking into because it could make your debt much less expensive to pay off. You can use this balance transfer calculator to figure out how much you stand to save with a balance transfer.
If a balance transfer seems like the right move for you, take a look at our list of the Best Balance Transfer Credit Cards to see if one is the right fit for your needs. You can also check out these three balance transfer cards that we rate highly.
As of May. 17, 2022
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| Wells Fargo Reflect℠ Card | Citi® Double Cash Card – 18 month BT offer | Discover it® Balance Transfer |
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Rating image, 5.00 out of 5 stars.
5.00 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. |
Rating image, 5.00 out of 5 stars.
5.00 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. |
Rating image, 5.00 out of 5 stars.
5.00 stars
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. |
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Apply Now for Wells Fargo Reflect℠ Card
On Wells Fargo's Secure Website. |
Apply Now for Citi® Double Cash Card – 18 month BT offer
On Citi's Secure Website. |
Apply Now for Discover it® Balance Transfer
On Discover's Secure Website. |
| Rates & Fees | Rates & Fees | |
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Credit Rating Requirement: |
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Credit Rating Requirement: |
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Welcome Offer: N/A |
Welcome Offer: N/A |
Cashback Match |
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Rewards Program: N/A |
Up to 2% cash back |
1% - 5% Cashback |
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Purchases: 0% intro APR, up to 21 months from account opening Balance Transfers: 0% intro APR, up to 21 months from account opening on qualifying balance transfers |
Intro APR: Purchases: N/A Balance Transfers: 0%, 18 months |
Intro APR: Purchases: 0% Intro APR, 6 months Balance Transfers: 0% Intro APR, 18 months |
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Regular APR: 13.74%-25.74% Variable APR |
Regular APR: 14.74% - 24.74%, variable |
Regular APR: 12.24% - 23.24% Variable APR |
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Annual Fee: $0 |
Annual Fee: $0 |
Annual Fee: $0 |
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Highlights:
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Highlights:
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Apply Now for Wells Fargo Reflect℠ Card
On Wells Fargo's Secure Website. |
Apply Now for Citi® Double Cash Card – 18 month BT offer
On Citi's Secure Website. |
Apply Now for Discover it® Balance Transfer
On Discover's Secure Website. |
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A debt consolidation loan
Debt consolidation loans are personal loans you take out for consolidating and paying off existing debt, like credit card balances. The upside of using a debt consolidation loan to pay off credit cards is that the interest rate you pay on your loan will generally be a lot lower than what your credit cards charge.
Also, with a debt consolidation loan, you'll typically get more time to pay off your credit card debt at a reduced rate than what a balance transfer will give you. It's rare for a balance transfer card's introductory rate to last more than 24 months, and in many cases, those 0% offers run out after 12 to 18 months. With a debt consolidation loan, you might easily get five years to pay off your credit cards at a lower interest rate.
Another good thing about a debt consolidation loan is that it won't hurt your credit score the same way a high credit card balance will. And if you make your monthly payment on time consistently, it could actually help your credit score improve.
A cash-out refinance
If you have a lot of home equity in a property you own, you may be able to consolidate your credit card debt via a cash-out refinance. With a cash-out refinance, you borrow more than your existing mortgage balance, and you can use the rest of the money for any purpose.
Say you owe $300,000 on your mortgage and do a $320,000 cash-out refinance. You'll get a check for the remaining $20,000. If that's what you owe on your credit cards, you'll be able to pay off those balances immediately. You'll then have to pay off your larger mortgage, but the rate attached to your home loan will generally be much lower than what credit cards charge. This is especially true if you have a high credit score.
You could be debt free before you know it
Paying off credit card debt quickly boils down to two things -- coming up with money to put toward your debt, and finding the most efficient way to pay that debt off (which generally involves consolidating it in one way or another). Now that you know what it takes to pay off your credit cards, you can move forward with your plan rather than spend your days letting your debt stress you out.
Still have questions?
Some other questions we've answered:
FAQs
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You can pay off a credit card debt more quickly by consolidating that debt and being strategic about coming up with extra money. A balance transfer is a good way to consolidate debt, but you can also look at a personal loan -- or a cash-out refinance if you own a home.
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You may not have money to pay off a credit card now. But certain changes could help you come up with the cash you need to knock out your debt. Those could involve getting a roommate to lower your housing costs or taking on a side job.
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Yes. A debt consolidation loan is a personal loan used to pay off debt. This can be an affordable way to pay off credit cards. If you own a home, you can also do a cash-out refinance, which is a mortgage loan that can be used to pay off debt.
About the Author
Maurie Backman has been writing about personal finance for years. A firm believer in educating readers without boring them, she aims to produce content that's interesting, engaging, and easy to understand. Sometimes, she'll even make the occasional joke. Maurie started out as a writer for Fool.com and joined The Ascent team in early 2019. In her spare time, she enjoys hiking, reading, and reveling in the fact that her creative writing degree actually amounted to something.
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