How to pay off credit cards with bad credit

Although it can be difficult to pay off debt at any time, there are options available to you, even if you have bad credit.

6 min read
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Finding a solution to help you pay off your debts can seem daunting – there’s so much information around that it can seem difficult to know where to start, We’ve got some information on different options that might be exactly what you’re after.

Remember, balance transfer cards and debt consolidation loans only work if you make sure you move your other debts to them; otherwise, you could find yourself in more debt.

1. Move to a balance transfer card

If your credit card debt hasn’t reached the point where it’s totally unmanageable, moving your money to a 0% balance transfer card could be an option worth considering.  

What is a balance transfer card?

In their simplest form, 0% balance transfer cards let you assign outstanding debt from your current credit card to a new one that has a limited 0% interest period. That means that, for the interest free period, you don’t pay any interest (assuming you stick to the conditions of the card). Ideally, this means you should be able to clear your debt quicker because you’re repaying the debt, not interest

However, there are a few things to consider with this:

  • You’ll usually be charged an initial fee to transfer your money over. It’s worth checking to see how this fee compares to the amount you’d save in interest.
  • You usually can’t transfer the debt to a credit card held with the same company or group your credit card debt is currently with.
  • Remember to do the balance transfer soon after you get the card – you usually have to do this within the first month or so, or you’ll end up losing the 0% interest rate.
  • Be careful to always make your payments on time – or you could risk losing the 0% rate.
  • Spending or using the new credit card for cash is likely to be expensive; these cards are designed to allow you to repay the debt because you’re not paying interest, rather than adding to the balance outstanding.
  • The eligibility requirements can sometimes mean it’s difficult to get this type of card if you have bad credit.

2. Apply for a debt consolidation loan

Debt consolidation loans allow you to amalgamate multiple debts into an affordable monthly payment, so whether you’ve accumulated balances on one, two, three or four credit cards, it could be an option.

How do debt consolidation loans work?

A debt consolidation loan is a loan that merges your existing debts into one monthly payment. These can be either personal loans or secured loans (on your home, if you’re a homeowner).

You’d need to work out how much debt you had and then check your eligibility for different loans, to see if borrowing more money would cover your existing debts.

Remember, that if you’re consolidating debt into a loan, you could be in debt longer and pay more in interest over the term of the loan. You should be careful if you’re securing debts against your home, as failure to pay could put your home at risk.

For more on the mechanics, see how debt consolidation loans work here.

3. Seek formal debt advice

If you’re struggling to repay the amount you owe, then there are many places that offer advice on your individual circumstances and who can recommend a solution that works for you. We won’t go into the details of the solutions here, but the important thing to know is that you’re not on your own if you’re struggling with your repayments. Charities, such as StepChange, Citizen’s Advice Bureau or the Money and Pensions Service (formally MAS) are all sources of impartial and often free help.