7 Ways to Pay off Credit Card Debt Faster

It can be pretty easy for credit card debt to compound and build up. Here are seven ways that can pay off your credit card debt for good.

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Adam Moelis
May 13, 2022
16 min read

Having a credit card is an extremely useful tool. Unlike debit cards, there are a lot of unique benefits to using your credit card. There are tons of different credit card programs that offer cash back opportunities, rewards points, frequent-flyer miles, and other various bonuses. Credit cards are also very important for building up a good credit history.

The Problem With Credit Card Debt

The problem is that using credit cards irresponsibly can quickly land you in serious financial trouble. Just under 95 percent of Americans have an open credit card account, and these accounts collectively owe more than $756 billion. Roughly 75 percent of accounts have a balance higher than $0, making the average balance around $5,300.

One of the most interesting factors that influence the average credit card balance is age. There is a very clear umbrella effect among the five generations. Depending on your age, you’re more likely to have a higher credit card balance than others:

  • Generation Z (1997-2012): $1,963
  • Millennials (1981-1996): $4,322
  • Generation X (1965-1980): $7,155
  • Baby Boomers (1946-1965): $6,043
  • Silent Generation (1928-1945): $3,177

Paying down a flat sum of a few thousand dollars can be difficult for most Americans. What makes credit card debt so dangerous is that these balances aren’t flat. The average interest rate for a credit card ranges between 17.5 percent and 23.9 percent. You can wind up paying several hundred dollars in interest depending on your balance and rate.

Six Ways to Pay Off Your Credit Card Balance

  1. Create a strict budget
  2. Use cash instead of plastic
  3. Focus on one debt at a time
  4. Use windfalls strategically
  5. Consolidate your debt
  6. Get another source of income
  7. Open a Yotta account

The good news is that there are a few options for getting out of credit card debt. Making smart financial decisions and seizing unique saving opportunities can help you to pay off your credit card. It’s going to take some hard work and sacrifice, but these are seven ways that you can pay off your credit card debt:

#1 Create a Strict Budget

You’re going to need to create a strict financial budget before you can focus on paying down credit card debt. The key to paying off debt is to create as much disposable income as possible. Creating a budget can help you cut back on spending and maximize your disposable income.

The first step to creating a budget is to gather any documents relating to your finances. Ideally, you should try to go back at least three months to create an accurate picture. Assemble any bank statements, pay stubs, bills, and receipts that you can find. You need to be able to account for every dollar that you’ve earned and spent.

Once you’ve collected all the paperwork, you’ll have to separate them into two categories:

  • Income is any money that you receive during the month. Wages from a job, interest payments, and child support would all be considered income. 
  • Expenses are anything that you spend money on. The cost of housing, utilities, transportation, groceries, child care, entertainment, and loan repayments would all be considered expenses.

Add up the total amount of your income and expenses. Divide the sums by the number of months that you included so you can get an average for both. Ideally, you should have a higher monthly income than expenses. 

If not, then you’ll need to make serious cutbacks to your spending. The money that’s left over after you’ve covered your expenses is considered disposable income. These funds are what you’ll use to pay off your credit card debt.

The last part of creating a budget is assigning value to your expenses. There are certain expenses that are essential, or “needs,” such as housing, groceries, and utilities. Other expenses are considered variable, or “wants,” such as eating out, going to the movies, and gym memberships. 

By temporarily cutting back your variable expenses, you’ll be able to reduce your monthly expenses. These savings can then be used to pay off your credit card debt faster.

#2 Use Cash Instead of Plastic

Physical currency such as cash, coins, and checks has been around for centuries. In the digital era, these cornerstones of the economy are quickly becoming relics of the past. The vast majority of purchases are made with plastic, such as debit or credit cards. While these cards are definitely more convenient and safer than carrying around cash, they do come with a few drawbacks.

It’s a lot easier to make an impulse buy or spend recklessly whenever you aren’t handling physical money. Swiping a plastic card or typing in its information can often feel like you’re spending “future” money instead of “present” money

There are a lot of people that have found themselves in serious financial trouble because of this psychological phenomenon. It could potentially explain how you’ve found yourself owing more money on your credit card than you can easily repay.

Shopping online can especially lead to needless and excessive spending. You can browse millions of items with a few clicks and easily give in to temptations. It can be difficult to remember that the virtual numbers indicating the price represent real money. 

All you have to do is type in your credit card information, and the item will be on your doorstep in a day or two. You can convince yourself that spending a little bit extra is justified since you work hard and deserve it. The problem is that the “little bit extra” can add up pretty fast.

Cash works the opposite way. If you don’t have enough to pay for the item, then you can’t “splurge” and buy it. It’s just that simple. You literally can’t spend $100 if you only have $50 in your pocket. Having to physically travel somewhere to make a purchase will also help you to curb any temptations. 

You’ll need to leave your home, travel to a store, pick out an item that you have enough cash to avoid, and hand over the money. There is a lot of time to come to your senses and realize that maybe you shouldn’t be spending any money right now. 

#3 Focus on One Debt at a Time

The key to paying down your debt is to focus on paying off one debt at a time. Now that doesn’t mean that you’ll stop making payments on other debts. Doing that will quickly destroy your credit score. You need to make the minimum payments on all of your debt but focus extra funds toward one particular account.

There are two opposing debt repayment strategies that you will have to choose from. Both of them are effective, and it’s up to you to choose which one you prefer:


The snowball method focuses on paying off the account that has the lowest remaining balance. By paying off the smallest balance first, you’ll reduce the total number of accounts that you have open. You can then use the money that was going towards that account and apply it to the next smallest balance. Eventually, you’ll only have one open account remaining, and you can focus all of your disposable income on it.

For example, let’s say that you had three card balances of $450, $1,200, and $4,800. Each of them comes with a minimum monthly payment of $50, and you have $100 of disposable income a month. 

You would make the minimum payment to all of them and apply the extra $100 to the $450 account. Once it’s closed, you’d now apply $200 to the $1,200 account and the $50 minimum to the $4,800 account. Eventually, you would be paying the entire $250 on the $4,800 account.

The biggest downside to the snowball method is that it doesn’t take into consideration interest charges. While the momentum of closing accounts is beneficial, you might end up paying more than you need to because of interest.


The avalanche method focuses on paying off the account that has the highest interest rate. You’ll have more accounts open for longer, but you’ll end up saving money in accrued interest. After the account with the largest interest rate is closed, you’ll focus on the account with the second-highest interest rate. Eventually, you’ll be left with the account that had the lowest interest rate when you started. 

For example, let’s say that the three balances from earlier have different interest rates. The $450 account has a rate of 12%, the $1,200 account has a rate of 23%, and the $4,800 account has a rate of 18%. 

While making the minimum payment to all accounts, you’d focus primarily on the $1,200 account because it has the highest interest rate. When it’s closed, you would then shift to the $4,800 dollar account because it has the second-highest. The last account is the $450 one because it has the lowest interest rate.

Using this method can save you money, but it can be difficult to maintain payments. It could be a very long time before you’re able to settle your first account. You might find yourself discouraged when your hard work and sacrifice don’t feel like they are accomplishing anything.

#4 Use Windfalls Strategically

A windfall is any sudden and unexpected boost to your finances. The most common examples are one-time spikes such as a tax refund from the IRS or a bonus from your employer. You might also experience a long-term windfall in the form of a wage increase.

It can be very tempting for people to spend their windfalls frivolously. The money is often viewed as being “extra” since it arrives unexpectedly. After all, you can’t really waste something that’s extra, so the money is typically spent on fancy dinners, tattoos, or new television.

If you owe credit card debt, then you can’t afford to think of any money as being extra. The luxury of having “extra” money doesn’t come until your accounts are settled. You should seize the opportunity to make a serious dent in your overall debt. 

Since the money isn’t needed to cover any essentials, you should put 100 percent of it towards your credit card debt.

#5 Consolidate Your Debt (Balance Transfer Credit Card or Personal Loan)

Using either the snowball or avalanche debt methods will be the best way to handle multiple accounts. However, the easiest solution would be to consolidate all of your accounts into a single balance. It’ll be more convenient to make a single monthly payment, and you can save quite a lot of money on interest.

The single most important factor in consolidating your debt is that you’ll need a good credit score. If your credit has already taken a hit because of your debt, then it might not be a good idea to try it. You could find yourself with a higher interest rate and end up in more trouble.

If you do still have a good credit score, then you can try one of these two options for consolidation:

Balance Transfer Card

Using a balance transfer card means that you’re using a new credit card to pay off that balance on your old ones. The difficult part of a balance transfer card is that you’ll need to be given a credit limit that’s big enough to cover all of your debt. Depending on the amount of debt you have, it might not be possible to be granted such a limit. 

The biggest benefit of this method is that a lot of credit cards will come with an introductory period that’s free of interest. Having twelve or eighteen months of interest-free debt could help you save a lot in interest payments. 

You’ll need to pay off the debt as soon as possible, though, because interest rates tend to skyrocket after the promotional period ends.

You should also be wary of potential fees for opening a balance transfer card. It’s fairly common for the credit card company to charge a one-time balance transfer fee that’s between three and five percent of the total. 

You’ll need to calculate how much interest you’d save by consolidating and determine if it’s worth the cost of the fee.

Personal Loan

Taking out a personal loan is another way to consolidate your debt. You would simply go to a bank, credit union, or online lender and ask for a loan that’s big enough to cover your debt. Instead of paying multiple credit cards, you would now be left with a single loan.

The good thing about getting a personal loan is that they usually come with a much lower interest rate than credit cards. Credit unions are particularly famous for offering flexible loan terms and low-interest rates, even for people with poor credit. It would be best to start there and try to secure your loan.

The biggest risk to taking out a personal loan is that you’ll have a set number of months to repay the debt. Credit cards are open lines of credit, and the balance can fluctuate frequently. Personal loans are fixed and divided up evenly. 

The minimum payment on your credit cards might end up being less than the personal loan. Make sure that you can afford to keep up with payments before you take out the loan.

#6 Get Another Source of Income

Perhaps the most obvious way of paying down debt faster is to simply have more money. By getting a second job or side hustle, you’ll have a higher monthly income. That will help you to budget more easily and afford to make higher payments toward your outstanding debts.

There are a lot of job opportunities available for people looking for a second source of income. Ridesharing, food delivery, and service industry jobs are readily available in most areas. If you properly budget, then you can put 100 percent of your earnings from your second job toward your debt. It might be a hard sacrifice for a while, but you’ll be able to pay off your debt much faster.

#7 Open a Yotta Account

One of the more unique options on this list is to open up a Yotta account. Yotta is a bank account option that functions in a similar way to traditional banks and credit unions. You’ll have the ability to deposit or withdraw funds and even have access to a debit card. The key difference with Yotta is how interest is paid.

Pretty much all banks and credit unions will pay you a fixed interest rate in return for keeping your money deposited. The problem is that these interest rates are around three percent or less. You’ll only wind up getting a few dollars in interest over the course of a year. The equivalent of a free cup of coffee every year won’t be enough to help you pay off your debt.

Yotta has an entirely different system regarding interest. The way that it works is you’ll receive a ticket for every $25 in your Yotta account at the beginning of each week. The more money you have in your account, the more tickets that you’ll receive. There will then be a drawing every night at 9 PM Eastern Standard. Depending on how many of your numbers match, you could win up to $10 million in cash or a Tesla Model 3.

The Takeaway

Paying off your credit card debt can be a long and difficult road. You’ll need to make some sacrifices, but all your hard work will pay off as long as you stick to the plan.

The key to paying down your debt is to reduce monthly expenses and increase your income so you can make larger monthly payments. You’ll need to decide whether you want to consolidate your debt or use the snowball/avalanche method.

On the other hand, you might just get lucky with Yotta and hit the big jackpot. You’ll have enough money to cover all of your credit card debt and have plenty leftover. Create your account today so you can enter the sweepstakes as soon as possible. 

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