4 cheapest ways to pay off credit card debt

Americans currently owe 14.3 trillion in credit card debt. Here are four debt-repayment strategies to help you pay yours off.

If you’re dealing with credit card debt, you’re not alone. American credit card debt now totals 14.3 trillion -- a 1.1 percent increase from the previous quarter, according to recent data the New York Federal Reserve.

Fortunately, however, there are ways to escape the debt cycle. Below are four tried-and-true methods for paying off credit card debt. Read one below for an explanation of each one, plus a closer look at the pros and cons. Armed with this knowledge, you should be able to make an informed decision about which debt-repayment strategy might work best for you. 

1. Consolidate credit card debt with a personal loan

The first debt-repayment strategy is to consolidate credit card debt with a personal loan.

Online marketplace Credible can also help you find the best rates available — just plug some of your information into their free online tools to compare options.

With a debt consolidation loan, you can combine multiple credit card balances into one. You’ll use the funds from the loan to pay off your credit cards and then you’ll only be responsible for making one, monthly payment toward your debts. 


Personal loans often offer a lower interest rate than credit cards, which means that choosing this method may help you save on the total amount you pay in interest charges. Additionally, this repayment strategy will help to streamline your finances since you’ll no longer have to worry about making multiple credit card payments each month.


Like any new type of financing, you’ll have to meet the lender’s eligibility requirements in order to qualify for a debt consolidation loan, which will likely involve checking your credit history. If you have a lower credit score, there’s a chance that you won’t qualify or that you may not qualify for a loan that’s big enough to cover all of your debts. Plus, it’s important to be aware that some lenders charge an upfront fee for closing on the loan.

If you think getting a debt consolidation loan might be the right choice for you, you can use Credible to see what options are available to you.

You can also use Credible’s personal loan calculator to find the best rates available to you. 


2. Open a balance transfer card

Similar to a debt consolidation loan, a balance transfer card allows you to combine your existing credit card balances into one. Typically, these cards also offer a zero percent APR  introductory interest rate on balance transfers, which will allow you a set period of time to work towards paying down your debt without accruing any new interest charges. 


If you can pay off your balance before the introductory interest period ends, you will save money by not having to pay interest charges. As an added bonus, knowing that period is time-limited can help you stay motivated towards paying down your debts.

Credible can help you find the right credit card for you. Choose balance transfer credit cards and get a breakdown of the annual fee, welcome offers, credit needed and more.



If you are unable to pay off your balance by the time the introductory rate period ends, you’ll start accruing new interest charges at the card’s regular balance transfer rate. Additionally, if you make a payment late, it’s possible the introductory rate period could be revoked. 

Those who think that a balance transfer card might be a better choice for them should consider visiting Credible in order to see all of their zero APR credit card options in one place.

3. Use the debt snowball method

With the debt snowball method, you’ll leave your existing credit card balances as-is. When implementing this debt-repayment strategy, you’ll continue making the minimum payment on most of your cards. At the same time, you’ll focus your energies on paying down the card with the smallest balance. 

Once you pay that card off, you’ll focus on paying down the card with the next smallest balance. You’ll continue this way until you’ve paid off all of your cards in full.


By paying down the card with the smallest balance first, you’re setting yourself up to experience a series of quick wins, which may help you feel more motivated to continue paying off your debts.


The debt snowball method doesn’t account for interest charges. Tackling your smallest debts first may lead to you paying more in interest over time.


4. Utilize the debt avalanche method

The debt avalanche method is the inverse of the debt snowball method. In this case, you’ll focus on paying off the card with the highest interest rate first. Once that’s paid off, you’ll move to pay off the card with the next-highest interest rate until all off your debts have been paid in full.


Employing this method will help you save on the total amount you’ll pay in interest charges. By paying off your highest-interest debts first, you’ll ultimately pay less over time.



It can take longer to see progress with this method, particularly if your card that has the highest interest rate also has a big balance.  

Ultimately, choosing the right debt-repayment strategy is a personal choice. However, it can be helpful to look at factors like if your credit history is solid enough to open a new card or take out a new loan. Then, once you’ve chosen a strategy and worked toward paying off your debts, it’s crucial to implement better credit habits going forward. For example, you might resolve to only charge what you can afford to pay off in full.