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The Fastest (and Cheapest) Ways to Get Rid of Credit Card Debt

By now, we’ve all heard it a million times: Credit card debt is a huge drain on our finances and the longer we wait to pay it off, the more we’ll pay.

But the numbers are pretty stunning. Let’s say you carry a $16,000 balance on your cards (like the average American household with debt) with an average interest rate of 15 percent. If you pay a 3 percent monthly minimum, it’d take a full 20 years to zero it out. Oh, and you’d spend $11,000 in interest.

If you’ve got debt you want to pay down faster, try these steps.

1. Get used to using your debit card instead

It sounds obvious, but the first step is to remove the temptation from your wallet. After all, it’s tough to make progress when you keep adding to your balance. Just think twice before you close an account—especially if you’ve had it a long time—as this could have an adverse effect on your FICO score.

Looking through your budget or old bank statements can often reveal areas where you’ve been wasting money or you can scale back.

2. Devise a plan of attack

Look at where your money is going now, so you have a clear picture of how much you can dedicate to debt repayment. Looking through your budget or old bank statements can often reveal areas where you’ve been wasting money or you can scale back. Once you’ve figured out what you can divert toward paying off your debt, commit to doing it.

And assess your debt, including interest rates and minimum payments. Knowing these numbers can help you create the most cost-effective repayment strategy, which is generally attacking the balance with the highest interest rate first, then working your way down the list (while paying at least the minimum on other balances, of course).

3. Research balance-transfer offers

First contact your bank or credit card company to find out if they can offer you a break. They might lower your rate or hook you up with a new, lower-rate or 0-percent-interest card to which you can transfer your existing balances. If you’re aggressively wiping out debt, this can be a big boon.

Take the $16,000 debt example: Let’s say you transfer that balance to a no-interest card and pay $480 a month, which is 3 percent of the original total. Even if the rate spikes to 17 percent after 18 months, when you’d paid all but $7,360, it’d take just three years to pay off the total balance at that rate—and you’d fork over a little more than $1,200 in interest.

If your bank won’t play ball, look for other attractive offers on sites like,, and Depending on your credit, you may be able to qualify for credit cards that offer favorable interest-free allowances and other terms. Whichever you choose, remember to read the fine print to make sure you’re not surprised by transfer fees and can, ideally, set a budget that allows you to pay off the balance before the interest jumps.

4. Consider a personal loan

A final option is transferring it to a personal loan—a strategy credit expert John Ulzheimer says can improve your credit because revolving debt, like card balances, is much more harmful to your score than installment debt, like personal loans. “In the most extreme cases, someone’s score could improve by triple digits, but for most, it would range from the low double digits to mid-high double digits—still a hefty improvement considering you haven’t paid off a penny of your debt,” says Ulzheimer.

An improved FICO score can also help you nab a better rate on a more worthwhile loan, like for a car or mortgage, and save money on that interest down the road. Talk to your bank or creditor about loan options, or consider online or peer-to-peer companies like SoFi, Earnest, Prosper and LendingClub. These smaller players have more wiggle room when it comes to whom they’ll approve and at what rates, so if you don’t get good terms with the big banks, you may have better luck with them.