Skip to content

Here are 3 reliable ways to pay off credit card debt

Jan. 10, 2022
9 min read
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Update: Some offers mentioned below are no longer available. View the current offers here.

If you have a lot of credit card debt, you probably already know the reasons why you need to pay it down.

Paying off your credit card debt can save money and reduce stress. When you add in the fact that less credit card debt might boost your credit score, it’s easy to see how eliminating your credit card debt is a smart idea.

But knowing why you should get out of credit card debt may not be enough to fix your situation. What you really need is a plan.

Paying off credit card debt doesn’t come with a one-size-fits-all solution. There are numerous ways to tackle the problem, and you should choose the option that works best for you. Below are three smart debt elimination approaches you may want to consider.

New to The Points Guy? Sign up for our TPG daily newsletter and check out our beginner’s guide.

Snowball method

If you owe outstanding balances on multiple credit cards, the snowball method can be a great way to start chipping away at your debt. With this approach, you pay down your cards in a particular order, starting with the smallest balances and working your way up.

First, you make a list of all of your credit cards with balances. Your list should order the cards from the largest balance at the top down to the smallest balance owed at the bottom. It might look something like this:

  • Capital One: $5,000 balance.
  • Chase: $3,000 balance.
  • Citi: $2,000 balance.
  • Retail store credit card: $500 balance.

You’ll need to continue making the minimum payment on every card on your list. This should help keep your accounts open and in good standing. Making the minimum payments will also protect your credit from score-damaging late payments.

Sign up for our daily newsletter

On the card with the smallest balance, you want to pay as much money as you can each month toward wiping out the full debt. In the example above, you’d make minimum payments on your Capital One, Chase and Citi accounts. Then, you’d funnel all of your extra money toward paying off the retail store credit card.

Once you pay off the card with the lowest balance, move up the list to the next account (Citi in the example above). Repeat the process. Only now, you should have more money each month to put toward the second card on your list since you’ve eliminated the first debt.

Follow this pattern until all of your credit cards have $0 balances.

Related: The best starter travel credit cards of 2022


(Photo via Getty Images)

Each time you eliminate a credit card balance, you’ll begin saving money that was previously going toward interest. Additionally, each card that gets paid off in full could positively impact your credit scores.

Credit scoring models, like FICO, pay attention to the number of accounts on your credit report with balances. From a scoring perspective, reducing the number of accounts with balances is a good thing.

Most importantly, paying down a credit card balance lowers your credit utilization ratio. Credit utilization describes how much of your credit limit you’re using (according to your credit reports). If your report shows you owe $5,000 on a credit card with a $10,000 limit, your credit utilization ratio is 50%. The more you lower your credit utilization, the higher your credit scores will typically climb.

Balance transfer credit card

Do you have a good to excellent credit score? If so, you might be able to leverage that good credit rating to get out of credit card debt sooner.

Many card issuers advertise introductory balance transfer offers on new credit card accounts. With a balance transfer offer, you may be able to take your debt from existing credit cards and consolidate those balances on a single new account. The cherry on top is that if you find the right offer, your new card may give you 0% financing on the transferred debt for a limited time.

Be aware that most card issuers charge balance transfer fees. A balance transfer fee is an immediate charge that’s added to your account when you move debt to the new card. If a card issuer charges a 3% balance transfer fee, for example, you’ll pay $300 to transfer $10,000 worth of debt over to your new account.

Here are some current examples to give you an idea of how credit card balance transfer offers work:

  • Citi® Double Cash Card: The card offers a 0% introductory APR for 18 months on balance transfers made within the first four months of account opening. After that, the variable APR will be 14.74%-24.74%, based on your creditworthiness. There is an introductory balance transfer fee of 3% (minimum $5) for transfers completed within the first four months of account opening. After that, your balance transfer fee will be 5% of each transfer (minimum $5).
  • Citi Simplicity® Card: This card is best suited for consumers who want to take advantage of the card’s 0% introductory APR on balance transfers for the first 21 months from the date of the first transfer (transfers must be completed within the first four months of account opening). There's also 0% introductory APR on purchases for the first 12 months of account opening — but the APR jumps to a variable APR of 15.49% to 25.49% once the introductory periods end.

It’s worth noting that some of your existing card issuers might offer you low-rate balance transfer opportunities too.

You can log into your account to search for options or call the customer service number on the back of your credit card to see if any offers are available.


A 0% or low-rate balance transfer could help you save more money as you work to pay off your credit card debt. By reducing the amount of interest you owe each month, you may be able to get out of debt faster.

To save the most money possible, you should aim to pay off your account balance in full before the introductory interest rate expires. Also, be sure to avoid adding more debt to your plate. You don’t want to transfer a balance away from an existing card, then charge up the balance on your original account again.

Often, a new balance transfer card may improve your credit scores.

A balance transfer can potentially reduce your number of accounts with balances and lower your overall credit utilization ratio. Of course, a new balance transfer card will also result in a new hard credit inquiry and a new account on your credit reports. Neither of these is necessarily good from a credit scoring perspective. But the other potential score benefits of balance transfers (e.g., lower credit utilization and fewer accounts with balances) often outweigh these two less influential factors.

Personal loan

(Photo by one photo/Shutterstock)

Another way to potentially speed up the process of paying down your debt is by using a personal loan to consolidate your credit card balances. Similar to the balance transfer strategy above, this approach involves using a new account to pay off existing debt.

Unfortunately, you won’t be able to secure a 0% APR on a personal loan like you often can with a balance transfer card. So, if you know that you can pay off your credit card debt quickly (i.e., before the introductory period expires), a balance transfer offer might save you more money. If you believe it will take more time to dig yourself out of credit card debt, a personal loan might be a better long-term fit.


If you have good credit, you may be able to secure a lower interest rate on a personal loan than you’re currently paying on credit cards. A personal loan with a lower APR could save you money in interest fees. The lower your new interest rate, the greater the savings.

Consolidating your credit card debt with a personal loan may also help your credit scores. First, suppose you pay off all of your revolving credit card debt with a personal loan. In that case, your credit utilization ratio should drop to 0% (a personal loan is an installment account and isn’t factored into your credit utilization ratio).

Credit utilization is a significant factor in your credit scores. It’s largely responsible for 30% of your FICO Scores. If you can pay off all of your cards with a personal loan and reduce your credit card utilization to 0%, your scores might increase significantly.

Moving your credit card debt to a single installment loan could help your credit in another way. When you pay off multiple cards, you’ll reduce the number of accounts with balances on your credit reports. As mentioned, the fewer accounts with balances on your credit, the better. Again, a personal loan will trigger a new hard credit inquiry and a new account on your reports. Both could have a slightly negative impact on your scores. But zeroing out your credit utilization ratio to 0% should overshadow this small negative impact in many cases.

Bottom line

Credit card debt is notoriously expensive. If you carry a balance from month to month, the interest you pay can cost you a lot of money. Plus, high-interest fees may wipe away any value you receive from the points and miles you earn on rewards cards.

Yet when you use credit cards responsibly (i.e., you pay off your balances in full each month and always pay on time), the accounts come with a host of benefits. Well-managed credit cards can potentially help you establish better credit scores, protect you from fraud and allow you the opportunity to earn valuable rewards.

The key to making your credit cards work for you instead of against you is this: Never charge more than you can afford to pay off in a given billing cycle. As long as you follow this rule, you can get a ton of value from your accounts without hurting yourself financially.

Featured image by GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.