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5 Credit Card Debt Repayment Strategies

Credit card debt is some of the most expensive debt because of the higher interest rates. Thankfully, there are several different credit card debt repayment strategies you can pursue to save money in interest charges! Here are some of the ways to save hundreds or thousands of dollars on your unpaid card balances.

#1: Focus on the Highest Interest Rate First

This is called the debt avalanche method [1]. If you have two or more credit cards with an unpaid balance, you will make your extra payments on the card with the highest interest rate. So, if you have one card with a 14% interest rate and the second card with a 21% interest rate, you will make extra monthly payments on the 21% interest rate card. You still make the minimum monthly payment on the other credit card to avoid any additional late fees.

This debt repayment method is often touted as the way to save the most money because balances with higher interest rates usually have the largest total interest payments.

#2: Pay the Smallest Balance First

Another credit card debt repayment strategy is the debt snowball method [2]. With this method, you pay the smallest balance first. If the credit card with a 14% interest rate has a $3,000 balance and the 21% card has a $5,000 balance, you will pay the $3,000 balance off first.

You normally end up paying more in interest overall with this credit card debt repayment strategy, however, it’s the better option if you have several balances and need several “quick victories” to keep your motivation levels high to become debt-free.

#3: Transfer the Balance to a Personal Loan

A third credit card debt repayment option is to transfer your balance to a personal loan. You can obtain a personal loan through a site like Sofi [3] where interest rates range from 5.49% to 14.24%. In most instances, the interest rate is lower than the current interest rate charged by your credit card company.

Another added benefit of using a personal loan is that it’s a fixed loan instead of a revolving account like your credit card where you can continue to “borrow” money after the balance is repaid. This allows you to cancel your existing credit card after the balance is transferred to prevent going into debt again in the future. Once the personal loan is paid off, it’s like your mortgage or student loans that don’t allow you to borrow any additional money once the loan is originated. Once it’s paid off, your credit card debt is gone.

#4: Use a 0% Balance Transfer Credit Card

This is possibly the best credit card debt repayment option if you can repay the entire balance within 12-18 months because it’s essentially an interest-free loan. Before applying for a new credit card, you should weigh the pros and cons of balance transfer credit cards [4]. At the end of the day, you will pay late fees and interest if you miss payments like any other credit card.

Balance transfer credit cards are similar to a personal loan because you transfer your existing balance to a lower interest rate. The best balance transfer credit cards [5] offer a 0% introductory rate for 12 to 18 months after paying a transfer fee of 3% or less. After the introductory period ends, the rate returns to the normal interest rate and you will have to pay interest on any remaining payments.

This option can easily save you hundreds of dollars in interest if you are intentional about repaying your debt as quickly as possible and can responsibly handle another credit card.

#5: Negotiate With Your Current Credit Card Company

Another option is to speak with your current credit card company about credit card debt repayment. On the first page of every billing statement is a toll-free phone number to contact their customer service. It isn’t guaranteed as it depends on your credit history and current balance, but you might be able to get a temporarily reduced interest rate if you can meet certain repayment goals.

At the end of the day, the credit card company loses money if you transfer the balance to a personal loan or another credit card. They might be able to match or beat the interest rates offered by these two options. One benefit of this repayment option is that you probably won’t have another credit inquiry on your report and you help improve the relationship with your current credit card company if you experience temporary financial hardship.


No matter how which credit card debt repayment strategies you pursue, they will all help you pay off your debt faster than simply making the minimum monthly payment. The secret is being intentional about making extra payments at the lowest possible interest rate. To help track your progress, the Personal Capital [6] money management tool will show your net worth grow with each monthly payment.