How to Get Out of Credit Card Debt Without Ruining Your Credit

It’s a painful drill—you’re short on cash, so you swipe your plastic, thinking you’ll catch up later. But you never really catch up, and now your balance looks like a nightmare. So what now?

Simple—you help your anxiety and your credit score by paying off your credit card debt.

You can commit to a payoff strategy, consolidate your debt, negotiate with creditors, and more. Overwhelmed? Don’t worry. We’re going to break down six different ways you can deal with credit card debt without ruining your credit. 

This article will show you:

  • Six different strategies to get rid of credit card debt.
  • Everything you need to know about debt consolidation.
  • Top tips for paying off credit cards.

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Check out more free tools for a debt-free life:

How to Get Rid of Credit Card Debt: 6 Ways of Paying off Credit Card Debt

If your debt is piling up as fast as your laundry basket, you’re not alone. America’s household debt is steadily increasing, up to a record $16 trillion in 2022.

Credit cards are a big part of it ($890 billion to be precise). 

Cheer up, though—because we’ve done the research and compiled six of the smartest ways of paying off credit card debt

Check them out—

1. Debt payment strategy

These bad boys are clever plans and tactics that you can use to deal with outstanding debts. 

You want these strategies in your arsenal to navigate tough financial obligations and itch closer to debt freedom

Here are two tangible debt repayment strategies you can consider:

Debt snowball

The debt snowball method is a popular repayment strategy that can put an end to your vicious cycle of credit card debt. 

The Harvard Business Review agrees that this may be the best way to pay off credit card debt.

In their research “The Best Strategy for Paying Off Credit Card Debt,” Harvard says the snowball technique works because:

  • It gives you a clear roadmap of your finances, eventually leading to a debt-free life.
  • Increases your motivation by focusing on individual debts.
  • Helps you gain momentum through a series of small wins.

Wondering how the debt snowball method works?

This method focuses on paying off your smallest debt first with minimum payments. 

Once you’re done clearing debt, you use the momentum you’ve gained to eliminate the next smallest debt, and so on. 

Snowballing your credit card debt will ensure you’re dealing with one debt at a time, making it easier for you to achieve small victories.

Curious to see if this method works for you? Check out our Free Debt Snowball Spreadsheet.

(Want more? Check out our new Get Out of Debt course.)

Debt avalanche

The debt avalanche method focuses on paying off debts with the highest interest rates first

So, you’ll first pay off the debt with the highest interest rate, and then move on to the debt with the second-highest interest rate. 

You repeat the process until you’ve paid off all of your credit card debt.

Here’s an example. Let’s assume you have these credit card debts:

  • $10,000 at an 18% interest rate.
  • $5,000 at a 16% interest rate.
  • And $4,000 at a 7% interest rate. 

With the debt avalanche method, you’d pay off the $10,000 balance first (debt with the highest interest rate), followed by the debts of $5,000 and $4,000 respectively.

On the other hand, following the debt snowball method would mean you’d pay off the $4,000 balance first (the smallest debt), followed by the debts of $5,000 and $10,000 respectively.

You can check out our Free Debt Avalanche Spreadsheet to see if this works for you.

2. Debt consolidation

Is your debt scattered across credit card accounts like confetti? You want to pay attention to this cool debt management technique. 

Debt consolidation can help streamline your debt repayment process if you owe several creditors

It gathers your pesky debts and lets you organize your accounts in one place. This way, you’ll have a single credit card debt to deal with—you may also secure a lower interest rate.

But what’s the best way to consolidate debt without hurting credit?

Now there are several ways you can streamline and pay off your credit card debt. Here’s a peek into some of the best ways to consolidate credit card debt

Debt consolidation loan

You can likely get a debt consolidation loan that offers a lower APR (Annual Percentage Rate) than you’re paying on your current debt. 

If your credit score is still in good shape, this type of personal loan can help you reduce your total interest charges by hundreds or even thousands of dollars.

Why would trade your credit card loans for a personal loan?

Unlike credit cards, personal loans have set repayment terms. If your card’s minimum payment is the reason you’re complacent about debt repayment, a personal loan can help.

But before you jump in on this, here are some things to consider:

  • You’ll need good credit to make a debt consolidation loan worthwhile. Sure, you can get a personal loan even with bad credit. But to qualify for an interest rate that’s low enough to be helpful, you’ll need to build good or excellent credit.
  • You want to make sure you can afford the monthly payment. Paying just the minimum on your credit card? The monthly payment on a personal loan will be higher. So, run the numbers on your budget before you apply for one.
  • Keep an eye out for origination fees. Some lenders will want upfront origination fees of up to 10% of the loan amount. Plus, this fee is subtracted from your loan disbursement, so you’ll need to borrow extra to get the whole amount. If you have excellent credit, you should be able to find lenders who don’t charge a fee.
  • Make sure this isn’t the only thing you do. Yes, it’s great to get a lower rate on your debt, but you should still actively work to pay your it off.

Credit card balance transfer

You can also consolidate your debt using a balance transfer credit card. 

These cards typically come with an introductory 0% APR on balance transfers for a set period (usually nine to 21 months). 

The idea is simple: You transfer your debts to this new card and pay off that debt during the interest-free introductory period.

Play your cards right and this technique can save you hundreds of dollars on interest charges.

However, there are some things to consider:

  • You may not be able to transfer all your debt. You usually can’t transfer more than your new card’s credit limit. The worst part? You won’t know what this new credit limit is until after you get approved. 
  • You may need to pay a balance transfer fee. Balance transfer credit cards usually charge an upfront fee of 3% to 5% of the transferred amount. Before you apply, do the math to determine how the fee will impact your savings. 
  • Keep in mind that a balance transfer credit card typically only offers the 0% intro APR on balance transfers. This doesn’t include purchases, which may start accruing interest immediately.
  • Like with any other form of consolidation, this isn’t the only step you should take. Keeping paying off your debt.

3. Home equity

Have equity in your house? You may want to use a home equity loan or home equity line of credit (HELOC) to pay off your credit card debts. 

But why would you trade your credit card debt for a home equity loan?

Home equity loans and lines of credit typically offer low-interest rates, as they use your home as collateral for the loan.

Plus, if you get a HELOC, you’ll still have access to that relatively inexpensive line of credit after you’ve paid off your credit card debt. 

That said, here are a few things to consider:

  • You may face limitations. Most lenders will only let you borrow up to 85% of your house’s value. This includes both your principal mortgage and your home equity loan or HELOC. So, you may not be able to borrow as much as you need depending on how much equity you have.
  • You could lose your house. If you default on this loan, your lender could foreclose on your house—even if you’re still up to date on your primary mortgage loan.
  • You may be responsible for closing costs. Closing expenses for home equity loans normally range from 2% to 5% of the loan amount—and HELOCs occasionally levy annual fees. Make sure you understand the costs before you proceed.

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4. Debt management plan

Nonprofit credit counseling agencies offer programs called Debt Management Plans (DMPs) to help consumers struggling with a large amount of unsecured debt. 

This typically includes personal loans and credit card debt. (They don’t cover student loans or secured debts such as mortgages or auto loans.)

You’ll want to go over a DMP with a credit counselor before signing up. 

If you decide it’s a good financial move, the counselor will begin negotiating with your creditor. They’ll usually negotiate lower interest rates, monthly payments, fees, or all of the above.

Once they reach an agreement with your creditors, you’ll start paying the credit counseling agency. The agency will then pay your creditors on your behalf.

Check out the list of government approved credit counseling agencies here.

Some things to keep in mind while speaking with a credit counselor:

  • You may have to close your credit cards as part of your agreement with the credit counselor. This can cause your credit utilization rate to spike, damaging your credit until you pay down the balances.
  • You’ll probably deal with a long “no new credit card” period. Applying for a new credit while you’re on a DMP can cause your creditors to withdraw from the program. 
  • There are fees involved. You’ll typically need to pay a one-time setup fee—typically $30 to $50—along with a monthly fee, ranging from $20 to $75. Review your budget to figure out if you can afford to pay before you start the process.

5. Debt Settlement

Debt settlement involves bargaining with your creditors to pay less than what you owe. 

You can do this on your own if you’re up for the legwork. But work with a debt settlement company or law firm if you feel overwhelmed.

When you work with a debt settlement firm, you’re typically required to stop paying your bills while the organization negotiates your new settled amount. 

Although settlement can save you thousands of dollars, there are several key drawbacks to consider:

  • It can damage your credit. You’re bound to miss a few payments while negotiating and this can result in significant negative damage to your credit score. But that’s not all—once you’ve settled, the creditor will add a note to your credit reports, causing more damage.
  • It can be pricey. Working with a debt settlement company or law firm may help you bag a better settlement, but it can cost you 15% to 25% of the settled amount.
  • You can also end up with a tax bill. The forgiven debt may be reported to the IRS as income, so you may have to pay taxes on it.

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6. Sign up for educational courses

Enrolling in online educational courses can be a savvy move when you’re grappling with debt. 

These courses provide valuable knowledge and skills—plus, flexible learning options that can fit into busy schedules. 

Moreover, a select few courses also come with affordable price tags, making them accessible if you’re on a tight budget

Ready to do some serious learning? Check out our course on “How To Get Out Of Debt Fast”. (This course is perfect for you if you’re struggling to get out of debt, and don’t know how to budget. You’re about to get your hands on some of the best personal finance tools.) 

How to Pay off Credit Cards: Debt Consolidation Basics

Of all the debt repayment strategies, debt consolidation is probably the most confusing one. 

So let’s break it down for you—

1. How does consolidated credit work?

Debt consolidation involves working with a new lender to refinance multiple loans into a single loan

There are tons of options for loan consolidation. 

The most common one is to take out a personal loan and use the money to pay off your other debts. Using home equity loans or balance transfer credit cards are other popular choices.

Regardless of the method you choose, the process is generally the same. 

You’ll begin by evaluating interest rates among lenders to discover who’s offering the best deal. You’ll then apply for enough money to meet your current debts. You start making payments on your new loan once you receive your loan funds.

When done right, debt consolidation can fetch you more favorable terms, such as a lower interest rate or lower monthly payments.

2. Is debt consolidation bad for your credit?

Debt consolidation isn’t inherently bad for your credit. Manage it properly and it can potentially boost your credit score. 

Consolidating your debts can initially have a negative effect on your credit score. This is because the process typically involves applying for a new loan or credit account, resulting in a hard inquiry on your credit report. 

Additionally, closing existing credit accounts as part of the consolidation process can affect your credit utilization ratio, another factor that influences your credit score.

However, in the long run, consistently making on-time payments and effectively managing your consolidated debt, can help improve your credit score

3. Is it a good idea to consolidate debt?

To consolidate or not to consolidate? The answer depends on your unique financial situation and the specific debts you’re targeting. 

You want to take a good, hard look at your finances to figure out if this is a wise move.

We’re going to help you with this list of scenarios where debt consolidation makes perfect sense—

  • You have good credit. Having a high credit score can help you qualify for 0% balance transfer cards and low-interest loans, making the whole process effective.
  • You have high-interest debt. Debt consolidation can help you save money by reducing the interest you’re paying on high-interest loans.
  • You’re overwhelmed with payments. Having a hard time keeping track of your debt payments? Debt consolidation can solve that by helping you merge multiple payments into one.
  • You have a repayment plan. Consolidating debt without a repayment strategy (like the debt snowball method) in place can prove to be a financial disaster. Before taking this step, decide on the payment strategy and make sure you’ll be able to stick to it. 

Kendall Meade, financial planner at SoFi, shares the secret to making debt consolidation work, 

The biggest piece of advice I can give to anyone who does debt consolidation is to stop using their credit cards until they have paid off the debt in full. I have seen many people consolidate their debts into a loan but then continue to run the credit cards back up. Now they have double the payments.

Kendall Meadefinancial planner at SoFi

How to Reduce Credit Card Debt: Tips for Paying off Credit Cards

Ready to swipe away your credit card debt and reclaim financial freedom? Here are some smart tips to help you—

1. Create a budget

We get it. You don’t want to be spending your Sundays planning how you’ll pay your bills this month. 

But there’s no substitute for budgeting. It can help you prioritize your expenses, ultimately ensuring you don’t overspend. 

This way, you can easily set aside some money to repay your debt sooner. You may also be able to sneak in some extra payments, reducing your overall loan cost.

Budgeting can come off as an intimidating task. But we’ve got your back. 

Start budgeting efficiently with our free and ready-to-use budget templates:

2. Automate payments

Automating your payments is a simple approach to ensure that your debts are paid on time, saving you money on late penalties. 

However, if you choose a debt snowball or debt avalanche strategy, you’ll need to be a little more hands-on to ensure you’re paying exactly what you want to each account.

3. Pay more than the minimum

Whenever your budget allows it, make extra payments. Credit card companies charge you a monthly minimum payment (typically 2% of the balance). 

But keep in mind that banks make money from the interest they charge each billing cycle. This means the longer you take to pay, the more money they make. 

To add to it all, the average amount of credit card interest paid is rising because of the Fed’s rate hikes and the rising levels of revolving credit card debt. In fact, credit card debtors in the US may pay an average of $1,380 in credit card interest this year.

4. Limit Hard Inquiries When Paying Down Credit Cards

If you don’t already have a balance transfer card, you can either open a new one with the 0% rate and minimal fees you’re looking for or look into another type of consolidation loan.

But when applying for new credit, you should be cautious. 

When you shop around for loan rates, look for lenders who are ready to pre-approve you and estimate your rate without a hard investigation on your credit.

5. Try Not to Max Out Your Card

If you use a balance transfer credit card to consolidate your debt, shifting your transferred balances to the card may result in you maxing out your credit line.

If the card is maxed out to nearly 100%, you may have a problem with your credit utilization ratio. 

The recommended ratio for each of your accounts is 30% or less. Exceeding one hundred might have a significant impact on your credit.

To the lender, you effectively maxing out a credit card makes them concerned that you won’t pay it back, lowering your credit score.

Key Takeaways

  • Getting rid of credit card debt without wrecking your credit is tough but doable. 
  • Follow the tips in this article, and you’ll be on your way to living a debt-free life. 
  • You can try different strategies (like the snowball or avalanche method) to pay off your debts, look into consolidating your debts, tap into your home equity, consider a debt management plan, or even negotiate settlements. 
  • Remember to assess your situation and choose the approach that works best for you. 
  • Don’t forget to make a budget, automate payments, and be careful about applying for new credit.


How to pay down credit card debt?

Here’s a step-by-step guide on getting out of credit card debt:

  • Assess your current financial situation: Review your credit card statements and understand the total amount of debt you owe, the interest rates, and minimum payments for each card.
  • Create a budget: Track your income and expenses to figure out how much you can allocate toward paying off your credit card debt. Find areas where you can cut back on expenses and redirect those funds toward debt repayment.
  • Prioritize your debts: Consider using the debt snowball or debt avalanche method to prioritize which credit card to pay off first. 
  • Negotiate lower interest rates: Contact your credit card issuers and see if they can reduce your interest rates. Highlight your positive payment history and mention competitive rates offered by other companies.
  • Make extra payments: Pay more than the minimum amount on your credit cards. You’ll chip away at the outstanding loan balance quicker and reduce the overall interest charges. 
  • Explore balance transfer options: Transfer your credit card balances to a card with a lower interest rate or a promotional 0% APR period. This strategy can help you consolidate your debts and save on interest.
  • Seek additional income sources: Increase your income through side hustles and gigs to boost your debt repayment efforts.
  • Avoid new debt: Track your progress regularly, celebrate milestones, and remind yourself of the benefits of becoming debt-free
How to stop paying credit cards legally?

Wondering how to get out of credit card debt without paying? 

Technically, you could stop paying your credit card bills—but in reality, you can’t get out of debt without paying it off.

Confused? Here’s an explainer—

  • Statute of limitations: You can stop paying your credit card debt and hope the statute of limitations in your state expires before the card company catches up to you. The only issue is the statute of limitations is somewhere between four and ten years in most states. Your creditors will probably take you to court for non-payment in the meantime.
  • Bankruptcy: This should be your last resort, as filing for bankruptcy can give you severe financial circumstances that will last for a long time. Filing for bankruptcy may sound like you’re starting over, but you may still be on the hook for some of your outstanding debt based on the type of bankruptcy.
    • Chapter 7 bankruptcy: Some of your assets are sold to pay back debt, meaning you could lose your home and personal property. A few months after filing, your remaining debt will be discharged. These typically won’t cover things like student loan debt or child support
    • Chapter 13 bankruptcy: You get set up on a court-ordered repayment plan. Any remaining debt after a certain time, like five years, might be discharged. 

Mind you, a bankruptcy filing can stay on your credit report for nearly a decade. Plus, it can reduce your credit score by 100 to 200 points.

How to pay off $10,000 credit card debt?

You can pay off your $10,000 debt sooner than you think with these five doable wealth management strategies:

  • Creating a realistic plan to pay off the $10,000 debt within one year. Draw up specific monthly budgets and stick to them.
  • Use a tried-and-tested credit card payoff strategy like the debt snowball or debt avalanche method. Pick the approach that suits your financial situation and helps you make steady progress.
  • Consolidate your debts into a single loan with a lower interest rate. Research different consolidation options and evaluate their terms and fees to find the best fit.
  • Seek help through debt relief options like credit counseling or debt settlement. Be cautious and research reputable organizations to avoid scams.
  • Increase your income by taking on a side hustle or seeking a higher-paying job. Consider your skills and interests to find a gig that aligns with your schedule. 
How to pay off credit card debt when you have no money?

Tackling credit card debt without any funds can undoubtedly be challenging. But there are several strategies you can consider to manage the financial burden:

  • Start by thoroughly assessing your financial situation, including your income, expenses, and outstanding debts. 
  • Next, create a realistic budget to identify areas where you can cut back on expenses. This may involve making sacrifices and prioritizing essential needs over wants.
  • Contact your credit card issuer and explain your financial condition. They may offer you a temporary hardship program or negotiate a reduced payment plan. 
  • Consider exploring diverse sources of income, such as side hustle work, part-time opportunities, or selling unwanted possessions. 
  • If your debt is substantial and you’re unable to make progress on your own, seek professional help. Credit counseling agencies can provide guidance and potentially negotiate with your creditors on your behalf.
  • Avoid drowning in further debt. Minimize or do away with the use of your credit cards until you have regained control of your finances.
Do debt consolidation loans hurt your credit?

Debt consolidation can reduce your monthly payments, but it can also cause a temporary drop in your credit score

A debt consolidation loan or a balance transfer card are two prominent debt consolidation methods.

Any credit application usually results in a hard inquiry, which can drop your credit score by a few points for a few months. But the overall credit effect of debt consolidation should be positive if you pay on time and change the habits that contributed to debt accumulation.

Does debt relief hurt your credit?

Debt relief may do your credit score good or dirty—depending on your financial situation and the method you pick. 

Debt settlement, debt management, debt consolidation, and bankruptcy can affect your credit in different ways. Here’s a breakdown:

  • Debt settlement can be risky for your credit score. You may have to stop payments while your debt settlement company is negotiating on your behalf. This will lower your score.
  • Debt management is a relatively safer pick. As long as you stick to your new repayment plan, your credit score should be unaffected.
  • Debt consolidation can also provide relief without significant harm to credit scores. However, applying for a new loan or credit card may result in a temporary score decrease due to a hard inquiry. 
  • Bankruptcy has severe consequences for credit scores, remaining on your credit history for seven to ten years. It also makes building credit in the future challenging. Explore all other debt-relief options before jumping on to this one.
What should be your first option to look into if you’re having trouble making your monthly payments?

If you are having trouble paying off your credit card’s monthly payment, immediately contact your lender. 

They may be willing to offer you a temporary payment plan, defer payments, or adjust the terms of your loan. Many financial institutions have hardship programs in place to assist customers facing financial difficulties.

Plus, explore government assistance programs that may be available to you based on your circumstances. This could include unemployment benefits, housing assistance, or debt relief programs.

These organizations can help you but won’t do it unless you ask for assistance.


See all

Credit counseling—Joint federal agency resources | Internal Revenue Service. (n.d.). Retrieved May 18, 2023, from

Debt Relief | Federal Trade Commission. (n.d.). Retrieved May 18, 2023, from

Home Equity Loans and Home Equity Lines of Credit | Consumer Advice. (n.d.). Retrieved May 18, 2023, from

Research: The Best Strategy for Paying Off Credit Card Debt. (n.d.). Retrieved May 18, 2023, from

Total Household Debt Surpasses $16 trillion in Q2 2022; Mortgage, Auto Loan, and Credit Card Balances Increase—FEDERAL RESERVE BANK of NEW YORK. (n.d.). Retrieved May 18, 2023, from

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