How To Pay Off Credit Card Debt
Quick answer: To pay off a credit card faster, try making room in your budget for larger payments. See if you can reduce outgoings, cut bills or boost your income. For some people, using a loan to pay off credit card debt can simplify payments and lower interest. If you’re struggling, free help is available from charities like StepChange.
Looking for the best way to pay off credit card debt? It depends on your situation. If you can afford to, paying the full balance helps you avoid interest and protects your credit score. If that feels hard right now, this guide has several tips on how to pay off credit card debt faster as well as ways to get support.
Read on to learn how to clear credit card debt, pay off multiple cards or consolidate your debt with a loan.
How to pay off your credit card
Each month you can choose how much of your credit card balance to pay. You’ll usually do this through your bank, but it’s worth considering setting up a direct debit. That way you’ll never miss a payment. You can choose the direct debit amount, including setting it to automatically pay the full amount.
Paying off your credit card in full each month is a good way to manage your card and protect your credit score. If you can’t afford to pay the balance all at once, read on for ways to pay it faster or lower the cost of interest — like paying the highest-rate card first or using a low-interest loan to pay off your credit card.
How much of a credit card should you pay off?
Always try and pay at least the minimum amount each month to avoid late fees and defaulting. Paying more will reduce the amount of interest you pay.
The best option is to pay off the full amount each month, so you don’t pay any interest at all. Credit cards are an expensive way to borrow unless you’re on a 0% interest deal.
It’s also worth knowing how your credit card payments affect your credit score. Missing payments or carrying a large balance will lower your score, while paying in full and on time can improve it.
How to properly pay off a credit card debt
If you’re ready to pay off your credit card fully, you can either:
- Pay the statement balance. This is the amount due at the end of a billing cycle. Lenders often give you 21 days to make the payment — anything you spend during this period will be added to the next month’s statement. If you always pay the statement balance in full and on time, the lender won’t charge interest. Setting up a direct debit can make this easier.
- Pay the current balance. This is the total amount you owe, including anything you’ve spent since your last statement. If you want to clear your card completely, you’ll need to make a manual payment for the current balance amount. You can usually do this through your bank’s website or app.
How to pay off credit card debt faster
If you’re looking for the fastest way to pay off credit card debt — whether that’s because you want to save on interest, improve your score, or simply feel more in control of your finances — here are some steps to consider.
Find ways to increase your credit card payments
Use a budgeting tool to see if you can cut spending in some areas. Try to negotiate better deals on things like your phone contract, utilities and insurance. If it’s realistic, think about ways to boost your income, like overtime or freelance work. Consider using non-emergency savings, especially if they’re earning less interest than you’d save by paying off your credit card.
Don’t take money from priority bills for your credit card payments. Priority bills pay for things that affect your home or health or could cause more debt or legal issues if you don’t pay them. Examples include rent, council tax, mortgage payments and electricity bills. Citizens Advice explains where to get financial support if you’re struggling with the cost of living .
Consider paying off credit cards with higher rates first
If you have several credit cards, you could aim to pay off the one with the highest rate first. This could help to clear your debt quicker, because the higher a card’s annual percentage rate (APR), the more expensive it is. If you choose this approach, the savings you make from paying off the priciest card could then go towards clearing the next highest card even faster. Just pay the minimum repayments on the other cards so you don’t get late fees.
This is just one of several debt repayment methods. If you want a quick win, consider paying off the smallest debt first instead.
See if debt consolidation is right for you
It’s possible to pay off credit cards with a debt consolidation loan or balance transfer card. This won’t get rid of your debt — it just shifts it to one account. Some people use debt consolidation to simplify their payments or switch to a lower interest rate. Debt consolidation isn’t right for everyone — lenders may turn you down or offer a higher rate, and there’s a risk of getting further into debt. Learn more below.
How to pay off multiple credit cards
If you’re looking to pay off multiple credit cards, it’s helpful to have a clearer picture of your borrowings. Your free credit report shows things like:
- How many credit cards you have
- Who your lenders are
- Your interest rates and credit limits
- Your current balances and how they’ve changed over time
- Whether you’ve missed any payments in the past six years
- Your credit utilisation, which is the percentage you’re using of your credit limit
There are several ways to repay debt on multiple credit cards. If you want to pay less interest overall, consider clearing cards with higher rates first. If you’re motivated by quick wins, you may prefer to pay off the smallest balance first.
Debt consolidation could be a way to simplify payments and lower interest while you pay off multiple credit cards. It means grouping your borrowings under one account. Debt consolidation isn’t right for everyone — learn more below.
How do you consolidate credit card debt?
Consolidating credit card debt is when you combine your debts into one monthly payment. It’s usually done through shifting your high interest debt to a loan or balance transfer card. This can help you simplify payments and switch to a lower interest rate — but you usually need a high credit score to get the best rates.
If you use a debt consolidation loan, you’ll make fixed payments each month until the loan is paid off. The longer your loan term, the more interest you pay overall. There are usually fees for setting up a loan and paying it back early.
If you use a balance transfer card, try to pay off your credit card debt before the 0% period ends and you’re put on the lender’s standard variable rate (SVR). The SVR is usually high and may be more expensive than your original card. There’s usually a fee for each balance transfer.
Should I get a loan to pay off credit card debt?
It depends on your circumstances. If you’re eligible and can comfortably afford the monthly payments, getting a loan to pay off credit cards may help you:
- Move to a lower interest rate to save money
- Simplify payments by grouping multiple debts under one account
- Stick to a fixed repayment schedule, because loans aren’t flexible like cards
It’s important to know that:
- There’s a risk you’ll end up in more debt. Avoid getting a loan if you can’t afford the payments or if you’ll be tempted to spend on your cards again as soon as they’re paid off.
- You may not be approved for a lower rate or a loan big enough to pay off your credit card debt, especially if you have a bad credit score.
- There are usually fees for setting up a loan and repaying it early.
- The longer your loan term, the more interest you’ll pay overall.
- Your score will dip when you apply for a loan but should recover over time if you take care of it.
If you think a debt consolidation loan could be right be for you, you can search loans with Experian and we’ll show your chances of approval. Searching is free, takes less than two minutes and won’t affect your score. Just remember, we’re a credit broker, not a lender. That means we don’t provide credit, but we can make your search for it easier, by helping you compare offers all in one place.
How to write off credit card debt
If you’re struggling to pay lenders, you may be wondering if it’s possible to clear credit card debt without paying it in full. In some cases, some or all of what you owe can be written off through an insolvency solution like bankruptcy, debt relief order or an individual voluntary arrangement. These options are only available in certain situations. For example, you can only be made bankrupt if you have debts over £5,000.
Insolvency is a last resort as it has serious impacts. Your score will drop, making it harder to get credit in the future. You may need to sell belongings or use savings to help repay the debts. Having a record on the Insolvency Register may affect your work, especially if you’re an accountant, lawyer or business owner.
There are other ways to get out of debt. For example, a debt management plan doesn’t write off your debt but instead lowers your payments to a more affordable amount.
Be wary of any companies that say they can write off debt using a legal loophole. Get free, unbiased advice from a registered charity like StepChange .
What’s the best way to pay off credit card debt?
It depends on things like how many cards you have, their balances and rates, and what you can afford. If paying less interest is the most important thing to you, consider paying off the card with the highest rate first or moving your debt to a low-interest loan or balance transfer card.
What happens if I can’t pay off credit card debt?
If you miss the minimum payment, your lender may charge penalty fees, close your account or take legal action like a county court judgment. If you only pay the minimum, you’ll be charged interest on your remaining balance. This can be very expensive as cards often have high interest rates. It also means your debt will grow. If you haven’t made a dent in your balance for more than 18 months, your lender may ask you to increase your payments.
Help is on hand if you’re worried about credit card debt. It’s important to ask for support from a credible organisation. For example:
- National Debtline explains how to get breathing space from payments
- Citizens Advice can help you make a plan to pay off debt
- StepChange offers unbiased debt advice through a free online tool
Frequently asked questions
What are some tips on how to pay off credit card debt?
If you’re looking to pay off credit card debt faster, here are a few tips to consider:
- Pay off the card with the highest rate first to save on interest
- Try to lower your spending or boost your income to increase your card payments, if you can
- Consider paying off your credit cards with a low-interest loan or balance transfer card to cut interest costs
How can you get out of credit card debt?
It depends on your circumstances. If you can afford to, increase your card payments. And if you have multiple cards, you can save money by clearing the card with the highest interest rate first. Paying off your cards with a low-interest loan or balance transfer card may help you lower interest costs — but this only works if you know you can clear your debt before the low rate ends. If you’re struggling, free advice is available from charities like National Debtline or StepChange .
How to pay off a credit card with another credit card?
You can do this with a balance transfer card. Your debt won’t disappear — it simply moves to the new card. But these cards often come with a 0% period, giving you a break from interest. Aim to pay off your credit card debt before the 0% period ends, or your interest rate and costs can soar.
How to get help with credit card debt?
If you’re struggling with credit card debt, it’s important to ask for free, unbiased advice from an organisation like National Debtline or StepChange .
Should I close a credit card after paying it off?
Closing an unused credit card may be a good idea if you’re worried about the temptation of spending more than you can afford, or the risk of identity fraud. Just know that closing a credit card may affect your score.