How to get out of credit card debt

Practical and simple steps you can take to pay off your credit card balance for good.

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If you’re struggling to deal with credit card debt, following a debt relief plan can help get you back on the path to financial freedom. If you need a little more help than that, there are free services you can access for personalized assistance and advice.

Since there’s plenty of advice out there, you’ll want to make sure it’s reputable and realistic advice. If you’re looking for some steps to take to start paying off your credit card debt, we’ve got seven simple ways below.

Seven ways to get rid of your credit card debt

These steps are designed to form a path to financial freedom – but even following them one at a time will help you along the way.

    1. Avoid making new purchases. To get rid of your debt, you have to stop adding to it. Stop spending and start using that money to pay down your existing balance. Remember that your ultimate goal is to be debt free. You can treat yourself again once you’ve achieved that.
    2. Calculate the total amount of money you owe. It’s time to face the hard truth. This process might be painful, but it’s necessary and short-lived. Get all your account balances together and make a list. Include your debt amounts, the interest you’re paying on each of those amounts and any other charges. Add them up and take a good, long, hard look before you say your goodbyes.
    3. Create a budget. Start with your monthly income and figure out your essential monthly expenses. It’s time for tightening measures, so expenses should include only the bare necessities such as bills, groceries, gas and other living expenses you need. After establishing your income and expenses, it’s time to create a monthly schedule for repaying your debts. Work out how much you can pay off each month, but be realistic and leave breathing room for any emergencies.
    4. Set up automated payments. Using your budgeted monthly payment amount, set up automated payments to make sure you actually pay what you plan to. Set up the payments to come out of your bank account the day after you get paid — this is a sure-fire way to stay committed to your budget.

Debt consolidation options

Compare debt consolidation loans

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
19.99% - 46.80%
$20,000
6 months - 5 years
A single administration fee of $194 for $1,500 loans and up
N/A
Magical Credit offers unsecured personal loans up to $20,000
19.99% - 39.99%. Varies by loan type and province
$35,000
6 months - 10 years
None
N/A
Consolidate your debt up to $20,000 for an unsecured loan and $35,000 for a secured loan.

Compare up to 4 providers

Compare balance transfer credit cards

Name Product Reward Purchase Interest Rate Balance Transfer Rate Annual Fee Minimum Income Credit Rating
Earn 4% Money-Back Rewards in up to 3 categories of your choice. Offer ends January 31, 2020.
19.95%
1.95% for the first 6 months (then 19.95%)
$0
$60,000
650+ recommended credit score
Get a 1.95% interest rate on balance transfers for the first six months. Valid within the first 30 days of account opening.
Save on interest by consolidating your higher-rate balances and get a low 12.99% purchase interest rate.
12.99%
0.99% for the first 6 months (then 12.99%)
$29
$12,000
650+ recommended credit score
Offers a 0.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends March 1, 2020.
Get 2% cashback after the Welcome Rate on all purchases. No cap and no limit.
19.99%
1.99% for the first 6 months (then 22.99%)
$99
N/A
Good, Excellent
Receive 5% cash back (up to $300 cash back) and a 1.99% balance transfer rate in the first 6 months to new cardmembers. No balance transfer fee upon application.
1.25% cash back rate on all purchases when your welcome offer ends. No cap.
19.99%
1.99% for the first 6 months (then 22.99%)
$0
N/A
Good, Excellent
Earn 2.5% cash back (up to $150 cash back) in the first three months. Offers 1.99% balance transfer rate in the first 6 months and no balance transfer fee upon application.
Earn 4% Money-Back Rewards in three categories of your choice such as groceries, dining, petrol and more. Ends January 31, 2020.
19.95%
1.95% for the first 6 months (then 19.95%)
$0
$12,000
650+ recommended credit score
Get 1.95% interest rate on balance transfers for the first six months. Valid within the first 30 days of account opening.
Low interest rates of 12.99% on purchases and cash advances.
12.99%
3.99% for the first 9 months (then 12.99%)
$20
$15,000
Good
Offers a 3.99% balance transfer intro rate for nine months to new cardmembers.
Save with a low interest rate and no annual fee
16.99%
3.99% for the first 6 months (then 16.99%)
$0
$12,000
650+ recommended credit score
Offers a 3.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends March 1, 2020.
Earn 1 AIR MILES® for every $5 you spend at eligible sponsors, stores, drugstores and gas stations (up to $30,000 annually) and 1 Mile for every $10 you spend anywhere else.
19.99%
1.99% for the first 6 months (then 22.99%)
$120
N/A
Good, Excellent
Receive up to 3,500 bonus AIR MILES®. Conditions apply (Ends January 20, 2020). Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Earn 2x AIR MILES reward miles per $20 spend at eligible AIR MILES partners and and 1 miles per $20 spend in credit card purchases.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
$15,000
Good
Enjoy AIR MILES on your every dollar spent and build a healthy credit history. Earn up to 800 AIR MILES bonus miles with minimum spend of $1,000 in the first three months. Ends January 15, 2020.
Earn 1% cash back on all other purchases. No caps, no limit.
19.99%
1.99% for the first 9 months (then 22.99%)
$0
$15,000
Good
Enjoy cash back on your every dollar spent and build a healthy credit history. Get up to 5% cash back with minimum spend of $2,000 in the first three months of card membership (Ends March 31, 2020).

Compare up to 4 providers

What if I have multiple credit card debts?

  • Consolidate your debts onto one card. This follows on from step 7, where you can consider a balance transfer credit card to help with your debt consolidation. As well as giving you the opportunity to save money on otherwise expensive interest fees for a promotional period of time, you can also focus on only paying off one account. It could also help you save on additional charges, such as annual fees.
  • Pay off the card with the highest interest rate first. You’ll save the most money by paying off the account with the highest interest rate first, followed by the account with the next highest interest rate and so on. Remember that you’ll still have to make minimum payments on your other cards during this time.
  • Pay off the card with the lowest balance first. For some people, paying off the card with the lowest balance first is more motivating. This strategy will reduce the number of outstanding accounts sooner and cuts down on interest charges in the process. Of course, you’ll also need to make minimum payments on your other cards at the same time.

Read our complete guide to balance transfer cards

Other tips to help get rid of credit card debt

In addition to the steps above, following these tips can also prove very helpful:

    • Switch to a card with a lower annual fee. This helps with reducing overall expenses, but can be doubly effective when combined with a balance transfer offer. If you want to minimize your outgoing card fees, you should consider a 0% balance transfer credit card with no annual fee.
    • Cancel cards you don’t use. This tip will help save on annual fees and other charges that you may be paying on your cards. Also, this will help reduce the temptation to spend more money.
    • Use your savings. Since your savings account could never offer an interest rate as high as the one you’re probably paying on your credit card, it follows that you should be using your savings to pay off your credit card debts. Use the cash under your bed, that rainy-day fund and every penny you can find to pay off those debts – because they’ll just swell up with interest if you don’t. Once they’re paid off, you’ll have more money you can put towards your savings to build them up again.
    • Make weekly payments. Even though your statement comes monthly, credit card interest is actually calculated on a daily basis. This means that increasing the frequency of your payments can help to reduce the total interest you pay over time. Whenever you have an extra dollar, consider paying off more of your credit card balance.
    • Seek professional help. Gaining control over your debts can be very difficult, especially at the beginning and it can be helpful to get professional advice. You can often find a range of free services online for debt management.

Bottom line

Credit card debt can often seem overwhelming, but by setting a budget, planning out your strategy and/or getting a debt consolidation loan or balance transfer card if you need one, you can get rid of credit card debt and make lasting, sustainable changes to your financial life. However, if after assessing your situation you still find yourself in a position where you don’t think you’ll be able to make meaningful progress toward paying off your debt, it may be time to consider debt relief as a solution.

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