We're Giving Away Cash! Enter to Win.

Skip to Main Content

How to Pay Off Credit Card Debt

If credit card debt is holding you back from the future you really want, it’s time to make a change.

Sure, it’s tempting to believe those rewards you’re earning are worth the crazy amounts of money you’re spending (1% cash back—really?). And sure, you can try to play the game of trying to outsmart the company by opening and closing credit card accounts willy-nilly for the cash rewards and perks.

But if you play that game long enough, someone is bound to end up the sore loser (and it’s never the credit card company). But we want you to win—so let’s talk about how to pay off credit card debt for good.

Why Credit Card Debt Is Bad

We’ve all grown up hearing that credit cards are just a way of life. Our parents taught us the value of hard work, treating others the way you want to be treated, and using the credit card in case of emergencies.

money icon

Get out of debt faster by refinancing your student loans with a company we trust.

It always starts out innocent, right? But after the fifth “emergency” this month, things start to spiral out of control. You don’t have enough paycheck to cover those emergencies, leaving you low on cash and high on stress as you try to keep up.

Credit card debt never really sounds like that big of a deal. But after a while (and a lot of spending), the minimum payments become harder and harder to pay off. And before you know it, you’ve got $10,000 of debt with nothing to show for it but an empty bank account.

If you don’t have a credit card, that’s great! Keep living on less than you make and saving up for what you need. But listen: If you do have a credit card, it’s time to get on a plan and kick that debt to the curb—for good.

What Are Other Credit Card Repayment Methods—and Do They Work?

Look, paying off debt is never easy. And there’s a lot of buzz surrounding the idea of “quick ways” to get rid of your debt. Here’s the truth: There’s no quick fix—but you can find a time-tested, permanent solution if you’re willing to roll up your sleeves and get to work.

Let’s take a look at the most-advertised ways to reduce debt (and why you should steer clear of these methods—at all costs):

  • Debt consolidation. This is basically a loan that combines all your debts into one single payment. This sounds like a good idea until you discover that the lifespan of your debt grows, which means you’ll stay in debt longer. And the low interest rate that looked so appealing up front usually goes up over time. 
  • Debt settlement. Debt settlement companies are the cold sores of the financial world. Run from this option! Debt settlement companies will charge you a fee and promise to negotiate with your creditors or reduce what you owe. But typically, they just take your money and leave you drowning in debt. No thanks! 
  • 401(k) loans. Never borrow from your 401(k) to pay off your debt. We repeat—never borrow from your 401(k)! Not only will you get hit with penalties, fees and taxes on your withdrawal, but you’re also stealing from your own future. Yikes.
  • Home equity loans. It’s never a good idea to borrow money against your home with a home equity loan. You risk losing your house if you can’t pay back the loan on time. Trust us—don’t do it!

These debt reduction strategies are risky at best and really only treat the symptoms. You don’t need to consolidate, settle or borrow someone else’s money to deal with your debt. You just need to change how you manage your money. Did you get that? Your money will never change until you do! 

But change only lasts so long unless you have a plan. And you can’t change without a plan. That’s why you need to start with a budget. It’s a plan that puts you in control of every single dollar you have by telling them where to go. And if you’ve never made a budget before, that’s okay! It’s never too late to get started. We even created a free budgeting app called EveryDollar to take the guesswork out of making a plan. It gives you the tools you need and even holds you accountable so you can reach your goals and dreams.

How to Pay Off Credit Card Debt

When it comes to paying off credit card debt, there’s no better way than the debt snowball method

Step 1: List your credit card debt from smallest to largest (don’t worry about interest rates). Pay minimum payments on everything but the little one.

Step 2: Attack the smallest debt with a vengeance. Once that debt is gone, take that payment (and any extra money you can squeeze out of the budget) and apply it to the second-smallest debt while continuing to make minimum payments on the rest.

Step 3: Once that debt is gone, take its payment and apply it to the next-smallest debt. The more you pay off, the more your freed-up money grows and gets thrown onto the next debt—like a snowball rolling downhill.

Repeat this method as you plow your way through debt. And don’t forget to close your credit card accounts after you pay them off . . . and then dance without caring who’s watching—you did it!

use the debt snowball method to pay off your credit card debt

Which Credit Card Should You Pay Off First?

Doesn’t it make mathematical sense to pay off the credit card with the highest interest rate first?

Maybe. But numbers aren’t the problem here. Behavior is—and the point of the debt snowball method is behavior change.

Starting with the smallest balance on your debt will help you make progress by seeing those little wins right away. That progress will be the fuel you need as you run full speed ahead to pay off all your credit cards one by one!

When you begin with the smallest credit card balance, you’ll knock it out pretty quickly and keep the motivation to pay off the next credit card—and then the next . . . and the next.

Motivation will take you all the way to the finish line of paying off your credit card debt. But if you start with the largest debt, you could lose steam and quit before you even get close to finishing. We’ve seen it happen time and time again.

Listen: You may not think paying off a $50 credit balance is a big deal, especially when you’re staring that $10,000 Visa bill in the face. But when you put that minimum payment toward your next debt and see your snowball grow, nothing will stand in your way.

Look, we’ve helped nearly 6 million people pay off their debt with the debt snowball method. If you stick with it, you’ll be debt-free in no time!

Should You Keep Your Credit Cards While Paying Them Off?

Absolutely not! Keeping your credit cards is out of the question. Go get every single credit card you own. Like, right now. Go. Put them on your kitchen table. Now grab some scissors and start chopping.

Responsible credit card use just doesn’t exist, no matter what the famous actors tell you in commercials. There’s not a single good reason to keep a credit card around—not even for points and miles and all that baloney.

Pay Off Credit Card Debt—No Matter Your Income

You might be thinking, Sure, paying off credit card debt fast works for people who make lots of money. Listen, everybody’s journey is different, but anyone with any income can pay off their debt quickly.   

Yes, your income matters. That’s why we say one way to pay off credit card debt faster is to increase it. So, lean into that side hustle. Ask for a raise. Pick up an extra shift. Anything you can do to get that number up while you’re attacking your debt will move the needle.

But remember, paying off debt is less about math and more about behavior. So, even if your income isn’t where you want it to be—or there’s a situation out of your control—you can change your behavior with the money you do have, one decision at a time. Saving money adds up quick!

That means brewing the coffee at home. Saying no when you really want to say yes. And most definitely? Getting on a budget (you can try EveryDollar for free). When you get intentional about where all your money is going, you start to see what has to stay and what’s got to go. Next? Throw all that extra at your debt. See, it’s happening faster already!

Because when you make up your mind that you’re going to do this, there’s no stopping you, no matter the size of your paycheck.

Now, take a deep breath—this could be a lot to take in. But we know you can do it. The things you really want in life (like that stacked savings account or a big ol’ nest egg for the future) are on the other side of this pile of debt. It’s hard to reach your dreams when you’re carrying the heavy baggage of debt. So . . . are you ready to get to work?

We’ll be with you every single step of the way. From your first small win to the day you get to scream, “I’m debt-free!” Ramsey+ can teach you what to do with your money next plus give you the tools to make it happen. Sign up for your free trial and get started on your debt-free journey today. Ready to do this? Let’s go.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

Related Articles

How to Cancel a Credit Card

How to Cancel a Credit Card

5 Minute Read | Debt

Want to know how to cancel your credit card account? You’ve come to the right place. We’ve got the steps you need to take to take to make it happen.

Ramsey Solutions  Ramsey Solutions

The Truth About Debt Consolidation

The Truth About Debt Consolidation

6 Minute Read | Debt

Debt consolidation claims to offer relief by combining your monthly payments into one. Don't be fooled. Learn the real way to get out of debt for good.

Ramsey Solutions  Ramsey Solutions

debt snowball

How the Debt Snowball Method Works

5 Minute Read | Debt

The debt snowball method is the fastest way to pay off your debt. You'll pay off the smallest debt while making the minimum payment on all your other debts, and gain momentum as each one gets paid off.

Ramsey Solutions  Ramsey Solutions

Get a FREE Customized Plan for Your Money!

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Assessment

Get a FREE Customized Plan for Your Money! 

Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
Take the Free Assessment