7 Tips to free yourself from credit card debt | finder.com
reduce your credit card debt

How to reduce your credit card debt

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7 ways to cut down your credit card debt and get your finances in control.

In 2016, over 167 million Americans owned at least one credit card and contributed to the $764 billion worth of national debt that has been accruing interest steadily. It’s no surprise that the average household carries around $16,000. The question is — how do we begin to pay back our debts or just avoid it altogether?

7 ways to reduce your credit card debt

If you find yourself burdened with an outstanding credit card balance and interest charges building each month, consider the following strategies for clearing your debt.

Our pick for reducing debt with a balance transfer

Blue Cash Everyday® Card from American Express

  • $150 statement credit after you spend $1,000 in purchases on your new card within the first 3 months.
  • 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).
  • 2% cash back at U.S. gas stations and at select U.S. department stores, 1% back on other purchases.
  • Low intro APR: 0% for 15 months on purchases and balance transfers, then a variable rate, currently 15.24% to 26.24%.
  • Over 1.5 million more places in the U.S. started accepting American Express® Cards in 2017.
  • Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits, gift cards, and merchandise.
  • No annual fee.
  • Terms apply.
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See Rates & Fees
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1. Make regular repayments and pay more than the minimum

Budget your monthly expenses, see what you can put towards your repayments and stick to a plan that is comfortable for you. Always try to pay more than the minimum so you can avoid the extra interest and get out of debt a bit earlier. Pro tip: setting up an automatic debit to transfer that amount to your credit card account on a recurring date each month will help ensure that you stay on track.

2. Repay the debt with the highest interest rate

Paying off the account with the highest interest rate first could represent significant savings — the interest saved could be used to repay the rest of your debt sooner. Once you’ve paid that account off, close it to avoid further charges and move on to the account with the next highest interest rate.

3. Apply for a credit card with a 0% balance transfer offer

0% balance transfer credit cards let you transfer your existing debt onto a new credit card with the benefit of paying no interest for an introductory period. It’s important to repay your balance transfer amount within the introductory period since the interest rate will typically revert to a higher interest rate.

Compare balance transfer credit cards

Name Product Introductory Balance Transfer APR Standard APR for Balance Transfer Annual Fee
0% for the first 15 months (then 17.24% to 25.99% variable)
17.24% to 25.99% variable
$0
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 17.24% to 25.99% variable)
17.24% to 25.99% variable
$0
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 15.24% to 26.24% variable)
15.24% to 26.24% variable
$0
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 12 months (then 15.24% to 26.24% variable)
15.24% to 26.24% variable
$95
Earn $200 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 15 months (then 15.24% to 26.24% variable)
15.24% to 26.24% variable
$0
Earn a $150 statement credit after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Rates & Fees
0% for the first 15 billing cycles (then 14.24% variable)
14.24% variable
$0
A low, variable APR on purchases, balance transfers and cash advances.
0% for the first 15 months (then 15.24%, 19.24% or 25.24% variable)
15.24%, 19.24% or 25.24% variable
$0
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees.
0% for the first 18 months (then 13.24%, 17.24% or 21.24% variable)
13.24%, 17.24% or 21.24% variable
$0
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% for the first 15 billing cycles (then 17.24% variable)
17.24% variable
$195
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
0% for the first 15 billing cycles (then 17.24% variable)
17.24% variable
$495
Receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
0% for the first 15 billing cycles (then 17.24% variable)
17.24% variable
$995
Earn 1x points when redeemed for airfare through the Luxury rewards program.
0% for the first 12 months (then 15.15% to 25.15% variable)
15.15% to 25.15% variable
$0
Earn $150 in statement credit after you spend $1,200 on purchases within the first 90 days from account opening.
0% for the first 12 months (then 15.99% to 25.99% variable)
15.99% to 25.99% variable
$59
20,000 bonus LifeMiles after first card use
0% for the first 12 months (then 15.99% to 25.99% variable)
15.99% to 25.99% variable
$149
40,000 bonus LifeMiles after first card use
0% for the first 12 months (then 12.99% to 17.99% variable)
12.99% to 17.99% variable
$0
Earn 25,000 bonus points when you spend $2,500 in the first 90 days from account opening.
0% for the first 12 months (then 11.99% to 17.99% variable)
11.99% to 17.99% variable
$0
2% cash back for all PenFed Honors Advantage members and 1.5% cash back on all purchases made with your card.
0% for the first 12 months (then 9.24% to 17.99% variable)
9.24% to 17.99% variable
$0
Low APR on all purchases including cash advances.
0% for the first 12 months (then 11.99% to 17.99% variable)
11.99% to 17.99% variable
$0
Earn 5x points on gas at the pump and 3x points on groceries. Earn 1x points on all other purchases.
1.99% for the first 6 monthly billing cycles (then 16.24% to 22.24% variable)
16.24% to 22.24% variable
$0
1% cash back to the nonprofits, K-12 schools, colleges and religious organizations of your choice.
9.95% for the first 6 months (then 17.99% fixed)
17.99% fixed
$39
Borrow up to $10,000 and get your credit score back on track.

N/A

9.15% to 26.15% variable
$0
This card offers the same low rate for purchases, cash advances and balance transfers.
0% for the first 12 statement closing dates (then 15.49% to 25.49% variable)
15.49% to 25.49% variable
$0
Earn more cash back for the things you buy most.
7.9% for the first 90 days (then 12.15% to 17.99% variable)
12.15% to 17.99% variable
$0
Enjoy perks and save money while gaining points with every purchase.
10.99% for the first 6 months (then 25.24% variable)
25.24% variable
$0
2% cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus 1% cash back on all other credit card purchases.

N/A

21.24% variable
$25
Establish credit history - with responsible use you may be upgraded to an unsecured credit card.

N/A

22.49% variable
$39
Helps establish, strengthen and even rebuild your credit.

N/A

21.24% variable
$29
Get worldwide purchasing power and flexibility as you work to build or re-establish your credit history.

N/A

26.99% variable
$0
Take control and build your credit with responsible use.
Aspire Platinum Mastercard®
Aspire Platinum Mastercard®
0% for the first 6 billing cycles (then 8.9% to 18% variable)
8.9% to 18% variable
$0
Enjoy a 0% introductory APR on purchases and balance transfers for the first 6 months.

Compare up to 4 providers

4. Consolidate your debt with a personal loan

A debt consolidation loan can offer substantial savings on interest payments compared to a credit card. It also often allows a longer term to pay back your debt. When considering a personal loan, factor in related costs such as application, establishment, monthly or yearly fees.

5. Refinance your home loan

While this may sound drastic, refinancing your home loan can offer with it several perks. Refinancing generally gives you access to lower interest rates when you take on a new lender’s deal. Carefully weigh up the pros and cons of this option though, because you’ll essentially be moving your credit card debt onto your home loan, which means stretching your debt over more years.

6. Discuss your options with your bank

By having a chat with your bank, you may be able to negotiate a more comfortable payment plan. You could be approved for an interest reduction or a short payment hiatus, which could help you catch up on your repayments.

7. Look into financial counseling

Financial counseling does not have to be expensive and you can even receive help for managing your debts. Obtaining professional financial and legal advice for your personal situation can sometimes be the first step towards debt freedom. You will be given personalized advice on how to consolidate your debts, manage creditors and protect your credit rating.

Don’t bury yourself in debt

While credit cards can be a convenient way to pay, make sure you’re in control of them and not the other way around. If you have found yourself in credit card debt, follow the necessary steps and seek assistance as soon as possible to regain control of your finances. When considering if a credit card is still the best option for you, compare all your options and be wise about what you need for your own personal circumstances.

How to avoid credit card debt

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To prevent falling into debt, the following tips can help you keep your credit card under control:

  • 0% purchase credit card. Get a credit card that offers 0% interest on purchases. This will allow you to make purchases and repay them without accruing any additional interest for a promotional period of up to 24 months.
  • Pay more than the minimum. Making only minimum repayments on your credit card balance typically means that you’re only paying 2.5% of your statement balance. At that rate, it might take you years to repay even a modest balance.
  • Stick to a budget. Create a budget for your expenses each month and schedule a payment plan to have your debts covered. Set up automatic debits to ensure that payments are made regularly.
  • Move your statement due date. By making sure your statement due date is just after payday, you’ll definitely have the funds to repay your credit card bill on time.
  • Identify why you first fell into debt. Was it overspending, high interest rates or a combination of the two? Try working with a budget or get a card with a lower interest rate.
  • Take measures to curb your spending. Creating a monthly budget should help curb expenditure, but you could also consider reducing your card’s credit limit as a stronger preventive for overspending.
  • Stop using your credit cards. If your spending problem requires more than monthly budgeting and occasionally leaving your credit card at home, consider cancelling your cards altogether. Prepaid credit cards and cash are surefire ways to avoid debt.
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Pictures: Shutterstock

Kyle Morgan

Kyle Morgan is a producer for finder.com who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.

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