12 Ways To Pay Off Credit Card Debt

The average US consumer owed $6,523 in credit card debt last year, according to TransUnion. That’s a hefty amount, especially when you’re dealing with other day-to-day expenses and debts.

If you’re trying to pay off your credit cards, you’re in the right place. These are the top 12 strategies you can use to do just that.

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Key Takeaways

• Pick a payoff method and stick with it. The snowball (smallest balance first) builds momentum, while the avalanche (highest APR first) saves the most on interest.

• A lower rate can save real money. Balance transfer cards (0% intro APR) and consolidation loans can cut interest costs if you qualify and pay down the balance on schedule.

• Pay more than the minimum. Minimum-only payments can stretch a balance out for years, so even a small extra amount each month shortens the timeline.

Summary generated by AI, verified by MoneyLion editors

1. Debt Snowball or Avalanche Method

These are both popular debt payoff methods that work for most debt types, including credit cards. They work like this:

• Debt snowball method: Focus on paying the card with the lowest balance first (regardless of interest rate). Pay only the minimums on all other cards so you have more money for the card you’re prioritizing. Once one card is paid off, move on to the next. Repeat this until you’re done.

• Debt avalanche method: Organize your cards by interest rate rather than balance. Pay off the highest interest rate card first, while making minimum payments on the rest. Once you’ve gotten rid of that first card, move on to the next highest interest rate.

The snowball method is good because it builds momentum and gives you small wins that keep you going. The avalanche method can save you the most money on interest, but you don’t get the quick wins.

2. Balance Transfer Credit Card

Transfer the balance from your current, high-interest credit cards onto a new one that has no interest for a limited time. You might need to pay a balance transfer fee, which is usually 3% to 5% of the transferred amount. However, the money saved in interest could offset this fee, ultimately saving you money.

Some cards come with a 0% introductory offer lasting a minimum of six months. That means you don’t have to pay interest on the card until the offer ends. If you pay off the new card within that initial window, you could save even more on interest.

3. Credit Counseling

Nonprofit credit counseling organizations can help you get on track with your debts. More specifically, they could set you up with a debt management plan (DMP). This is a low-cost plan that combines your eligible debts into one repayment plan. It can also reduce your monthly payment.

Under a DMP, you’ll make one payment every month to the credit counseling agency. They’ll then pay your creditors on your behalf. DMPs usually last three to five years, after which your debts will ideally be gone.

4. Debt Consolidation Loan

This is a type of personal loan meant to make debt repayment more manageable. With debt consolidation, you combine your unsecured debts into one new loan. The new loan has its own interest rate and term.

The advantage of debt consolidation is that you’ll only have to make one monthly payment. If you have good credit, you could also get a much lower interest rate than what you were paying before.

For example, you could get a debt consolidation loan with an APR under 10% if you have good credit. That’s significantly lower than what most credit cards have.

5. Home Equity Loan or Line of Credit

If you’ve built up equity in your home, you might be able to use some of it to pay off your credit cards. There are two options here:

• Home equity loan (HEL): Like any loan, you receive a lump-sum payment you can use for things like repaying credit card debt. These usually have a fixed repayment term. Interest rates can be fixed or variable. Most lenders let you borrow up to 80% of your home equity.

• Home equity line of credit (HELOC): This works like a credit card in that you draw from it up to a set limit. You can use it to pay off your credit cards, but you’ll pay interest on the amount borrowed. You can also only draw from your HELOC over a certain period. After that, you’ll need to start making payments on the remaining balance owed.

6. Borrow From Friends or Family

It might feel uncomfortable at first, but if you genuinely need the help with credit cards it’s worth considering. You’ll need to choose someone you have a good relationship with, and who isn’t also struggling financially. Be sure to iron out any details before borrowing money, like:

• How much you need

• Why you need it

• When you’ll be able to repay them

Borrowing from someone you know usually means no interest charges or fear of damaged credit. But your personal relationship is important, too, so don’t take advantage of someone’s generosity.

7. Get a Raise or More Hours at Work

Depending on your employment situation, you might be able to ask for more hours at work. You might even get overtime, which could boost your paycheck. This doesn’t have to be a permanent solution, but it can give you extra cash to help you pay down your debts.

If you’ve been at your job for a while, ask yourself if it’s time for a raise. Go to your supervisor with a strong case for why you deserve one. Having specific performance metrics, like how much you’ve boosted revenues or retention rates, helps.

8. Take on a Side Gig

The average side hustle brings in $1,051 a month, assuming 11 hours a week dedicated to it. But even if you earn a fraction of that amount, that’s money you could put toward your credit cards.

9. Redo Your Household Budget

It’s good to review your budget every so often, like once a quarter or whenever there’s a major life change. If you haven’t looked yours over in a while, now’s a good time to do so. You might find areas you can cut down on, so you have more cash for your debts.

Be sure to check your bank account and credit card statements at the same time. Look for any automatic, recurring withdrawals you might have forgotten about or that you no longer need.

For example, you could have a monthly subscription to a streaming service like Hulu or Netflix. You might even have several. Canceling even one or two frees up some funds for your credit card debt.

10. Use a Financial Windfall

Have you received a financial windfall recently? Or are you expecting one? If so, don’t spend it until you’ve paid off your credit cards first.

Financial windfalls come in all forms. Maybe you’ve gotten your inheritance or are eligible to access a trust fund. Even a tax refund counts.

In 2026, the IRS reported that the average refund amount is $3,571. That’s over half of the average credit card debt of $6,523.

11. Stop Investing or Saving (Temporarily)

If you’re actively saving for retirement or something else, you probably don’t want to quit doing that. However, you might be better off temporarily postponing any other investments until you’ve paid off your high-interest debts.

According to financial experts, you should prioritize paying off any debt with a 8% APR or higher. After that, you can refocus on your retirement.

Note: If you don’t have an emergency fund, focus on building at least a small one first. After that, you can prioritize your debts or investments.

12. DIY Debt Settlement or Repayment Plan

Debt settlement involves negotiating with your creditors to reduce how much you owe, usually by a certain percentage. The process can be lengthy and expensive, especially if you go through a company. There are also some risks involved, such as:

• Potentially damaged credit

• Late fees and interest accrual

• Not guaranteed to work

• 15% to 25% fee (if you go through a debt settlement company)

• Potentially shady debt settlement companies

Debt settlement is usually best when you’re running out of options. However, you can lower some of the risk (and expense) by cutting out the middleman. That’d be the debt settlement company.

Instead, reach out to your creditors directly and try negotiating. They might be willing to reduce what you owe. But more likely, they’ll be willing to set up a new repayment plan that works better with your financial situation. They might even temporarily waive interest or other fees as you get back on your feet.

Consider all of your options carefully before going this route. It’s not for everyone.

FAQ

What’s the fastest way to pay off credit card debt?

Going through your current expenses, cutting out any that aren’t necessary and putting the excess toward your credit cards is one method. Others include debt consolidation, a HELOC/HEL, taking on more hours or getting a side gig.

What’s the best way to pay off credit card debt?

It depends on your goals and financial situation. If you’re motivated by quick wins, go with the debt snowball method. You’ll get to see your progress much faster that way. If the goal is to save on interest, consider the debt avalanche method or a balance transfer card with a 0% introductory period.

What happens if I can’t pay my credit card?

Reach out to the credit card company as soon as you realize you won’t be able to pay. Tell them what’s going on and they might be willing to work with you, even temporarily. You could also turn to a nonprofit credit counseling organization. If you don’t do anything, you’re likely to face penalty APR charges and late fees. These add up and can damage your credit score. Eventually, your debt could get turned over to collections where it will remain on your report for up to seven years.

How can I pay off $40,000 in credit card debt?

You could potentially take out a low-interest debt consolidation loan or home equity loan, but only if the terms and fees make sense. Don’t stop there, though. Cutting unnecessary expenses and taking on more hours at work can give you more cash to put toward the debt. Try to pay as much as you can each month to lower it (and minimize interest charges).

What’s the statute of limitations on credit card debt?

The statute of limitations is the amount of time a debt collector or credit can take legal action to collect what you owe. Depending on the state, it’s usually three to six years. Note that the statute of limitations begins once you miss a payment on your debt. It resets if you charge the card or make a new payment.

Photo Credit: RainStar/ iStock.com

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.

• Debt management plan (DMP): A nonprofit-administered plan that consolidates unsecured debts into one payment, often at a reduced 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.

• Statute of limitations: The limited window — typically three to six years, depending on state — during which a creditor can sue to collect.

Sources

• TransUnion — Q4 2025 Credit Industry Insights Report

• Investor.gov (U.S. SEC) — Pay Off Credit Cards or Other High Interest Debt

• IRS — 2026 Filing Season Statistics

• FTC — How To Get Out of Debt

Summary generated by AI, verified by MoneyLion editors