How to pay off large credit card debt?

It can seem impossible to pay off debt sometimes, but there are options out there to make it easier. Start by seeing what you can cover with proper budgeting and planning, before considering options like debt consolidation, balance transfers and debt management plans.

5 min read
Woman looking through her bills

How to pay large credit card debt quickly?

When you’ve got debt hanging over your head, it can feel like you’re carrying weight around, but

“the most important thing to know is your options - because there are plenty of them.”

However, some will be quicker action plans than others and a lot will depend on just how much you owe - £2,000 is a different ball game to £10,000, for example.

1. Work out what you owe

First things first, you need to know how much you collectively owe so if you’ve got more than one credit card, do the maths and add up the outstanding total on each.

While you’re splitting your debt by account, work out which is the most expensive (i.e. charges the highest interest) and then tackle that one first. Then, once you’ve cleared that line of credit any spare pennies can be used to put towards the less pricey ones.

2. From here on out, make at least the monthly minimum payment

Although this won’t get you anywhere fast, it’ll prevent any additional charges from being added to your debt and every little helps, right? If you can, to cut the amount of interest you’re being charged, try and put as much as you can feasibly afford towards each credit cycle.

Tip: Talk yourself out of any kind of ‘this won’t make a difference’ mindset. £5 here and £10 there all adds up and can make a big difference overall.

3. Turn to your savings

Set a bit aside in case of an emergency, but if you’re sitting pretty on a load of savings that you have no use for right away, you could consider using them to wipe your credit card now and then use the money you would have been putting towards your debts to top it up in the future. The reason for this is that you’re likely to save in the long run, as the interest accrued on your credit card debt will be likely higher than any interest you’ll earn on your savings.

4. Transfer your debt

Consider a 0% balance transfer card. This is when a card issuer offers you the opportunity to transfer over your existing debts to your new account in return for an extended interest-free period, which can last for anything from 12-36 months. This usually works by you transferring over your existing debts within a set time period once you’ve opened your account, so don’t delay if your card goes through (the sooner you transfer the sooner you save on interest payments).

Basically, this frees you up to focus all your attention on clearing your debt without worrying about interest, which, more than likely, means you’ll be debt-free quicker.

There are two pretty important caveats with this one though:

  • The first is that you will be charged interest after the 0% period expires so to be truly effective, make sure you clear your balance by then.
  • The second is that you may be charged a fee to move your money over - before you get put off by this do some number crunching to see if the amount you’d save outweighs the initial fee, this is usually around 3%.

5. Look into a debt consolidation loan

With a debt consolidation loan, you can bundle multiple lines of credit into one manageable payment, to one lender. First and foremost this can make managing your debt much easier but on top of that, if your debt consolidation deal offers better rates than your credit card(s), it could even be cheaper, too.

As with our previous point, before diving into this option just remember to sit down and carefully run through the calculations to make sure it makes financial sense - after all, there’s no point switching from one type of debt to another if there are no actual benefits involved. It’s also worth considering that while the payment might be more manageable month-to-month, you could end up paying more overall, over a longer period of time.

Another thing to consider is your affordability both now and in the future. With a loan, you’re locked into set monthly instalments over a set term and if you slip off the schedule, you could find yourself in hot water.

6. Seek a Debt Management Plan

If your credit card debt’s so deep you just don’t see a way out by yourself, a Debt Management Plan (DMP) could be the answer for you. In brief, these allow you to repay your debt at a rate that’s affordable for you and your DMP provider mediates between you and your creditor(s).

They can also sometimes negotiate agreements like settling in part, where you pay back an affordable portion of the debt. Visit the Money Advice Service to find out about your debt management options.

Whatever the level of debt you owe on credit cards, every situation has a solution, and tackling your debts can be done through a number of avenues.

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