How To Pay Off Credit Card Debt

Paying off credit card debt can feel like the equivalent of climbing a mountain. But that doesn’t mean it’s impossible. With the right strategy, you can start making steady progress and work toward getting your credit card debt under control.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Key Takeaways

• A lower rate can save real money. Personal loans averaged 11.40% in February 2026 versus 21% for credit cards, so consolidating may cut your interest costs.

• Minimum payments keep you stuck. Paying only the minimum can stretch a balance out for years — paying even a little extra each month shortens the timeline and lowers total interest.

• Balance transfers buy interest-free time. A 0% intro card can pause interest, but watch the 3% to 5%

  transfer fee and pay it off before the promo end

Summary generated by AI, verified by MoneyLion editors

10 Ways To Pay Off Credit Card Debt

The best way to pay off credit card debt depends on your goals and financial situation. Here are several strategies to help you become debt-free faster and reduce the amount you pay in interest.

1. Debt Snowball Method

The debt snowball method uses a snowball effect to build momentum by paying off debts from the smallest to the largest balance. When you pay off the smallest debt, you move the minimum payment you were making on that card to the next smallest debt.

Here are the steps to follow

1. List all of your debts from smallest to largest.

2. Make minimum payments on all debts except the smallest debt.

3. Pay as much as you can on the smallest debt until it’s paid off.

4. Take what you were paying on the smallest debt and add that to your payment on the next smallest debt.

5. Repeat until all credit card debt is paid off.

2. Debt Avalanche Method

The debt avalanche method is a debt repayment strategy where you pay off the balance with the highest interest rate first. This can also help you save money on interest.

Here’s how to do it:

1. List all of your debts with their outstanding balance, minimum payment, annual percentage rate (APR) and due date.

2. Rank each one by APR, with the highest APR at the top of the list.

3. Decide how much extra you can afford to pay each month toward your debt. Add that amount to your minimum monthly payment on your credit card with the highest APR. Make the minimum payment on your other cards.

4. When you pay off the first credit card, apply the extra amount to your debt with the next highest APR.

5. Repeat until you pay off all credit card debt.

3. Transfer Your Balance to a 0% APR Card

Another strategy to save money on interest is a balance transfer. A balance transfer involves consolidating your credit card debt by moving high-interest balances to a new card with a 0% or low introductory APR. Transferring all of your credit card balances to a single card also makes debt repayment more manageable.

Balance transfers often have fees, typically between 3% to 5% of the transfer amount or a flat dollar amount. Once you transfer your balance, try to pay it off before the introductory period ends. If you don’t, the remaining balance will begin accruing interest at the card’s regular APR, which may be significantly higher.

4. Consolidate Debt With a Personal Loan

Another way to consolidate your credit card debt is to use a personal loan. With this strategy, you take out a loan and use the funds to pay off one or more credit card balances. Then, instead of managing multiple monthly payments, you make one fixed payment toward the personal loan.

This can be a good option if you qualify for a lower interest rate than what you’re currently paying on your credit cards. Many personal loans also have fixed repayment terms, which can also give you a set payoff date. 

Also, personal loans generally have lower interest rates than credit cards. The latest Federal Reserve data from February 2026 shows that credit cards have an average interest rate of 21%, whereas personal loans have an average interest rate of 11.40% for 24-month loans.

5. Make More Than the Minimum Payment

Paying only the minimum payment can keep you in debt for years. The minimum payment is a small percentage of your total balance, covering the interest accrued for the month and a small portion of the principal. If you continue to pay just the minimum, the interest can compound.

When possible, pay more than the minimum amount due. Even small extra payments can help reduce your balance faster and lower what you pay in interest over time.

6. Enroll in a Debt Management Plan

If you’re struggling to make your credit card payments, a debt management plan may be able to help. These are typically offered through nonprofit credit counseling agencies. 

Under a debt management plan, the agency will work with your creditors to try and reduce interest rates, waive fees and combine debts into one payment. You make a single payment to the agency, which then distributes funds to creditors.

Setup fees range from $30 to $50, and there’s often a monthly fee between $20 and $70 per month for ongoing management. Many states have a cap for setup fees.

7. Tap Your Home Equity

If you’re a homeowner, you can take advantage of your built-up equity to pay down your credit card debt. Two common options are a home equity loan and a home equity line of credit (HELOC), both of which allow you to borrow against the value of your home.

Because these loans are secured by your property, they typically offer lower interest rates than credit cards. However, there’s risk involved. If you are unable to make the payments, you could face foreclosure.

8. Ask Your Card Issuer for a Lower APR

Having a lower APR on your credit cards could help reduce the amount of interest you pay and lower your minimum monthly payment. One way to do this is to contact your credit card issuer and ask.

There’s no guarantee that the issuer will approve your request, but it may be more likely if you have a history of on-time payments and a strong credit profile. Even a small reduction could allow more of each payment to go toward your principal balance instead of interest charges.

9. Put Bonuses and Tax Refunds Toward Debt

Rather than spending any extra money you receive throughout the year, such as cash gifts, a work bonus or a tax refund, you can put it toward your outstanding balances. Any money you pay toward your credit card above the minimum payment goes directly toward the principal. If you make a lump-sum payment, it reduces the amount you owe and lowers your minimum monthly payment and how much you pay in interest over time. 

10. Boost Your Income and Increase Monthly Payments

If you’re only bringing in enough income to make the minimum payment, or you want to pay your credit card debt off sooner, you could increase your income and put that money toward paying off debt. This could be a part-time job, freelance work or selling items you no longer need.

For example, if you’re paying $100 per month toward a $5,000 balance and find a way to earn an extra $200 every month, increasing your payment to $300 could shorten your payoff timeline. Let’s say the credit card has a 22% APR, paying $100 per month would take about eleven years and 5 months and cost $8,678.08 in interest. Paying $300 per month would take 21 months to pay off and cost roughly $1,021.62 in interest.

Keeping Debt Under Control

Paying off credit card debt is a big accomplishment. But if you want to stay debt-free, you may have to make a few changes to how you use credit going forward. Healthy financial habits can help you avoid falling back into debt and make it easier to manage unexpected expenses.

Make sure to pay your bills on time and keep your credit card balances as low as possible, or preferably, pay the balance in full each month. Track your spending to help you identify areas where you may be overspending. It may also help to build an emergency fund so you have cash available for unforeseen expenses instead of relying on credit cards.

FAQs

What is the best way to pay off credit card debt?

The best way to pay off credit card debt is to stop using your card and create a plan to get out of debt. You can use proven strategies like the debt snowball or avalanche method, doing a balance transfer, tapping home equity and other methods.  

Is $20,000 in credit card debt a lot?

Yes, $20,000 in credit card debt is considered a lot. In 2025, a TransUnion report showed that the average American had $6,523 in credit card debt. Depending on your financial situation, this amount may be difficult to pay off, but it’s not impossible. It could take years, but it may still be manageable with the right strategy. 

How to pay off $5000 in debt in 6 months?

Paying off $5,000 in debt over six months will require discipline and the right debt repayment strategy. For example, let’s say you have a $5,000 balance at a 20% APR. To pay it off within six months, you’d need to pay $883 per month.

What is the 2/3/4 rule for credit cards?

The 2/3/4 rule for credit cards is a guideline used by some credit card companies when evaluating applications. Under this rule, you may be less likely to be approved if you’ve opened two new credit cards within 30 days, three within 12 months or four within 24 months.

Will closing cards hurt my credit score?

Closing credit card accounts can hurt your credit score, especially if it lowers your available credit and increases your credit utilization ratio. It could also affect the average age of your accounts, a factor used in credit scoring models. 

Photo Credit: Astarot/Getty Images/iStockphoto

Key Terms

• Debt snowball method: Paying off balances smallest to largest to build momentum, then rolling each freed-up payment into the next debt.

• Debt avalanche method: Targeting the highest-APR balance first to minimize total interest paid.

• Balance transfer: Moving high-rate card debt to a card with a low or 0% intro APR, usually for a transfer fee of 3% to 5%.

• Debt consolidation loan: A fixed-rate personal loan used to pay off multiple balances, leaving one monthly payment and a set payoff date.

• Minimum payment: The smallest amount due to keep an account current — paying only this keeps most of your money going to interest.

• Debt management plan (DMP): A nonprofit-administered plan that consolidates unsecured debts into one payment at a negotiated rate over three to five years.

• Home equity loan / HELOC: Borrowing against your home's value at a typically lower rate, with foreclosure risk if you can't repay.

• Credit utilization ratio: The share of available revolving credit you're using; lowering it can help your score.

Sources

• Federal Reserve (FRED) — Credit Card Interest Rate, All Accounts

• Federal Reserve (FRED) — Finance Rate on 24-Month Personal Loans

• FTC — How To Get Out of Debt

Summary generated by AI, verified by MoneyLion editors