The Fastest Way to Pay Off Credit Card Debt

The primary reason for getting rid of high interest rate credit card debt is to enable your money to work harder for you. Throwing away money on credit card interest is an incredible waste. The best way to avoid this, besides staying out of debt in the first place, is to work to lower your interest rate as low as possible while paying off your debt as quickly as possible.




Here’s how I dug myself out of $8,000 worth of credit card debt after college:

  1. I listed all of my accounts in order of interest rate, starting with the highest.
  2. I started paying the minimum on all cards except for the one with the highest rate. I paid as much as I could afford on that account, initially starting out with a fixed $200 per month payment.
  3. When I received an offer to open a new card with a 0% promotional interest rate on balance transfers, I applied and received a card with a $2,000 credit limit.
  4. I transferred $2,000 from the highest rate card to the new card, but kept paying the highest amount on the original card.
  5. Once that card was paid off, I added $200 to the amount I was paying on the card with the next highest interest rate.
  6. I marked my calendar for when the 0% promo rate was to expire, and a month before, I opened a new 0% card and transferred the balance over.
  7. I continued to pay down my other cards that charged interest with gusto.
  8. Anytime I came across extra money, such as a tax refund or a sign on bonus for a new job, I sent the money straight toward my highest interest rate credit card.
  9. Eventually I was left just with the balance on the 0% card. I continued to pay it down aggressively, and when the promo rate expired, I continued to open new accounts at promo rates to transfer the balance.
  10. Within about five years, I was debt free.


Now, there are a few things to consider here.

First, every time I applied for and opened a new account, my credit score took a hit. This only worked for me because I had excellent credit, which I maintained through on-time payments for all my debt, including my student loans, car payment and even utilities.


Second, each balance transfer incurred a fee that was typically a percentage of the balance I was transferring. I had to make sure the interest I was saving by transferring the balance was more than I paid in a balance transfer fee.


Finally, I had actually stop using credit cards in order for this to work. Once I was out of the debt, I did go back to using credit cards, but I kept a close eye on the balance so that I was able to pay it off each month.


If your credit isn’t great, you may not qualify for low promotional rate cards. If that’s the case, then consider calling up your card companies and requesting that they lower your rate. You may even suggest that if they lower your rate, you’ll transfer other balances onto that card. Remind them of your on-time payment history and threaten to transfer your balance away if they don’t work with you.


The key to success here is never wavering on that large payment amount. Use this Debt Blaster to calculate the difference it will make.



A guest post by Kelley Long: Kelley is a CFP® with Financial Finesse, the leading provider of unbiased workplace financial wellness programs to employers of choice, and a researcher on the book “What Your Financial Advisor Isn’t Telling You: The 10 Essential Truths You Need to Know About Your Money.” Her daily work assisting clients with their financial planning questions informs her writing on the Financial Finesse blog as well as her frequent media appearances speaking on financial matters. Follow her at @kclmoneycoach and @Fin_Finesse.



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