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Credit card debt

Paying off credit card debt. What are my options?

To reduce your credit card debt as quickly as possible you should try to pay off as much as you can afford every month because the bigger your credit card balance, the greater amount of interest will be added. Try to keep your balance to a minimum.

On every credit card bill your card provider will state a minimum amount you have to pay. However, you should aim to pay more because just paying off the minimum will not reduce your balance by much once interest has been added.

Also bear in mind that if you miss payments, you'll have extra charges added to your credit card debt as well.

Credit card debt problems

If you're struggling with your credit card debt and are having difficulty paying it off, you should stop using your card immediately. Let your credit card provider know you're having problems. They may be able to suggest a payment plan that could help your situation.

If you’re making the minimum payment on your credit card you could end up paying off this debt over a long period. Minimum payments tend to mainly cover the interest and charges on a debt, rather than the balance. If this continues for 18 months or longer, it’s what’s known as a ‘persistent debt’.

If you have a persistent debt, your credit card company will write to you and ask you to increase your monthly payment. Some credit card companies are changing their terms and conditions (T&Cs) to increase the minimum payment and help customers reduce their debt. 

Find out more about persistent debt and minimum payments.

By understanding your budget, you may find that you’re able to pay off your credit card quicker at a rate you can afford.

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Transferring the debt via a balance transfer

Some credit cards let you transfer the balance from another card. Transferring a debt from a card with a high rate of interest to one with low or 0% interest could help you pay off the debt faster.

But low or 0% interest credit cards are hard to get if you don’t have a good credit rating. This means you can’t rely on balance transfers as a way to deal with your credit card debts.

Also look out for fees when transferring a balance. Most credit card providers charge 2-3% of the amount you’re transferring as a one-off fee. If you’re transferring a balance to take advantage of a lower interest rate, the fees may mean you save less than you expect.

If you do transfer a balance, make sure you cut up the old credit card and close the account. Otherwise, you may be tempted to keep spending on both cards and you’ll end up with two debts.


Frequently asked questions

How do you pay off credit cards?

There are different ways to pay off a credit card. Before you start, it’s recommended that you stop using the credit card you want to pay off. This means the amount you owe will stop growing, making it quicker to repay.

Options for paying off your credit card balance include:

  • Making a budget to find out if you can make savings in any areas of spending, freeing up some money to increase your credit card repayments. This will also reduce the amount of interest being added.
  • Transfer the balance to a zero percent interest credit card and then make regular payments to pay this off
  • Take out a consolidation loan, if you can afford the repayments, to pay off the credit card balance. If you’ve got a bad credit history, you might find it difficult to get a loan with an affordable interest rate

If you’re struggling with your credit card repayments and other regular bills, get free advice.

Is it better to pay off a credit card in full?

It depends on what you can afford to do.

Paying off your credit card in full will mean you pay much less in interest and charges, which can save you a lot of money.

But, this might not be the best option for you, if the only way to pay off your credit card in full is to either:

  • take out more credit you might struggle to repay, or
  • make big cutbacks on your monthly spending

It might be better for you to pay off your credit card more gradually if:

  • You have a bad credit score, meaning new credit may be expensive to get, due to the higher interest rates
  • You can only afford to pay off the card in full by cutting back on payments to priority bills or essential household living costs

Credit card debt advice

If you’re struggling to cover the minimum payments on your credit card, you should get free debt debt advice. Contact us (free from all landlines and mobiles) or try our free online debt advice tool.