How to pay off credit card debt faster

Credit cards are built around the minimum payment. When you carry a balance, most of each minimum goes to interest, and only a small piece reduces what you actually owe. Add variable rates and multiple cards, and a balance can barely move month to month even when you never miss a payment.

Paying off faster comes down to two levers: putting more money toward principal, and paying less interest along the way.

If you have more than one card, the order you pay them in matters. Two popular methods:

• •Debt snowball: pay minimums on everything, then put any extra toward the smallest balance first. You get quick wins that keep you motivated.
• •Debt avalanche: pay minimums on everything, then put any extra toward the highest interest rate first. This usually costs the least in total interest.

Snowball tends to win on motivation; avalanche tends to win on math. The best method is the one you will actually stick with.

See exactly how the two compare for your balances with our free debt payoff calculator.

The other lever is your interest rate. A couple of common ways people reduce it:

• •A fixed-rate consolidation loan: combine balances into one installment loan with a single fixed payment and a defined payoff date, possibly at a lower rate than your cards (your rate depends on your credit, income, and state, and is never guaranteed).
• •A balance transfer: move balances to a card with a low or zero introductory rate. Watch for transfer fees and what the rate becomes after the promotional period ends.

Lowering the rate means more of every payment goes to principal, which shortens the timeline.

• •Pay more than the minimum whenever you can, even a small fixed amount above it each month.
• •Apply windfalls (a tax refund, a bonus) directly to principal.
• •Pause new charges on the cards you are paying down so the balance actually falls.

1. 1List every balanceWrite down each card, its balance, its interest rate, and its minimum payment so you can see the whole picture.
2. 2Pick a methodChoose snowball or avalanche. Use the calculator to see the payoff time and total interest for each.
3. 3Set a fixed monthly amountDecide what you can put toward debt each month, then keep minimums current on everything and send the extra to your target card.
4. 4Consider lowering your rateIf a consolidation loan or balance transfer would cut your total cost, it can speed things up. Compare the total cost, not just the monthly payment.