How to Pay Off Credit Card Debt

By Michelle Lambright Black
Reviewed by: Ana Gonzalez-Ribeiro, AFC®
Published on: 04/21/2022

After a period of decline, credit card debt is on the rise again[1]. So, if you feel like you’re trapped underneath a pile of credit card debt, you might feel better knowing you’re not alone.
Credit card debt is unsecured debt because no property, like a house or a vehicle, secures the money your card issuer loans you. It is also revolving debt — where your balance can change monthly based on how much you charge and pay off.
The average American credit card debt is $5,525, according to Experian[2]. Those with retail store credit cards carry an extra $1,887 in credit card debt on average.

More Americans carry a balance on their credit cards than pay it off, according to the American Bankers Association[3]. If you consistently find yourself revolving outstanding credit card balances from month to month, here are some strategies that could help you pay off your credit card debt fast.

When should you be worried about your credit card debt?

How much credit card debt is too much?

When it comes to credit cards, any balance you cannot afford to pay in full each month is too much.

If you rely on credit cards to get by each month and cannot pay off the monthly balance, it might be time to start worrying about your credit card debt.

According to Federal Reserve data[5], the average credit card interest rate was 16.30% in Q2 of 2021. Carrying a credit balance over from one month to the next causes credit card interest fees to kick in on your account. This habit can easily cost you thousands of extra dollars per year, depending on the amount you owe.

Having excessive credit card debt doesn’t make you a bad person. But it does mean that you may want to evaluate your budget and make a plan to pay off your credit cards ASAP.

How does credit card debt affect your credit score?

Your credit score is a numerical representation of your credit worthiness. It tells lenders whether you’re a good credit risk or if loaning money to you is potentially a bad investment.

Paying your credit card bill on time each month can benefit your credit score. But payment history isn’t the only factor that affects your credit score where credit card debt is concerned.

The amount of credit card debt you owe — and more specifically how those balances relate to your credit limit — can have a meaningful effect on your credit score. This balance-to-limit relationship is known as your credit utilization ratio.

With FICO® Scores, 30% of your credit score is based on the amount of debt you owe, and your credit card utilization rate is a primary factor within this category. Credit utilization is calculated on both a per-card basis and in the aggregate. The lower you keep your utilization rates, the better it should be for your credit score because it shows lenders you aren’t over-extended on your credit.

Is my spouse also responsible for my credit card debt?

Generally, the person who owes the debt (aka the primary credit card holder) is the one responsible for paying it off. However, there are exceptions to this rule.

If your spouse is a joint account holder (not merely an authorized user), then he or she would also be responsible for the credit card debt. And if you reside in a community property state or state laws require it, your spouse might be on the hook for your credit card debt and more.

Can I be arrested for credit card debt?

In the United States, you cannot be arrested for failing to pay your credit card debt. But that might not stop an unethical debt collector from threatening you with arrest if you fail to pay. However, it’s important to understand that such threats are lies.

It’s important to understand that if a third party debt collector harasses you or uses dishonesty to try to compel you to pay, it could be violating the Fair Debt Collection Practices Act. You can submit a complaint[6] to the Consumer Financial Protection Bureau if you believe a debt collector is violating your rights.

What happens to credit card debt when you die?

When you die owing credit card debt, creditors may be able to come after the assets in your estate before your heirs receive an inheritance. If there isn’t enough cash in your estate to cover the debt, your beneficiaries might even have to sell some of your assets to cover those balances — credit cards or otherwise.
In a scenario where you pass away owing more than what your estate is worth, your survivors usually aren’t responsible. But in some cases (i.e. community property states, joint credit card debt, etc.), a spouse could potentially be on the hook for any outstanding credit card balances in your name.

Can credit card debt be forgiven?

The good news is credit card debt can be forgiven. The bad news is this is not an easy process, and your credit report and credit score might suffer for years after the fact. You might also have to pay taxes on any amount of debt your card issuer opts to waive.

Partial credit card debt forgiveness may be possible through the process of debt settlement. Debt settlement is typically only available to cardholders who are three or more months behind on their bills.

You can attempt to settle your credit card debt by negotiating with the credit card issuer, hiring a debt relief company or attorney to represent you, or working with a reputable credit counselor to enter into a debt management plan.

Bankruptcy is another approach that could result in the liquidation or reduction of your debt. However, this option may be best reserved as a last resort due to the negative impact bankruptcy can have on your credit and future your borrowing prospects.

What is the safest way to pay off credit card debt?

Two of the most popular debt repayment strategies are the debt snowball method and the debt avalanche method. Before you follow either of these approaches, however, you should know where you stand financially.

How can I budget in order to pay off debt?

A budget is a powerful tool when you’re trying to pay off debt and gain control of your financial wellbeing. The process isn’t about restriction, as some people think, but is a way for you to afford the things that matter most to you.
When you’re ready to start paying down debt, consider starting with an overview of your budget.

  1. Make a list of all your expenses:
  • Housing
  • Utilities
  • Transportation
  • Food
  • Credit card balances and other debts
  • Miscellaneous costs
  1. List how much money you have coming in each month.
  2. Subtract your expenses.

Cut variable expenses where you can to free up extra debt elimination funds. And, if you’re able to do so, you might consider trying to increase your income through strategies like asking for a raise, selling unwanted items, working part time, or starting a side hustle.

Debt snowball vs. debt avalanche

Using a debt elimination strategy has the potential to help you pay off your credit card debt quicker. But you’ll need to choose the approach that works best for your situation.

  • The debt snowball method involves targeting smaller credit card balances first. As you eliminate smaller debts, it can provide a sense of accomplishment that encourages you to keep going. Additionally, lowering the credit utilization ratio on individual credit cards faster can be good for your credit score.
  • The debt avalanche method may result in greater interest fee savings because you eliminate the highest interest rate credit card debt first. Paying less money in interest fees can be a great move for your bank account.

With each strategy, it’s critical to pay at least the minimum payment on all of your credit cards every month until the debt is gone. When you pay off one credit card balance, you can apply that amount to the next credit card on your list and continue the process.

Can I negotiate my credit card debt down?

If you fall behind on your payments, your credit card issuer might be willing to negotiate a debt settlement agreement with you. But keep in mind that debt settlement isn’t always easy and your credit score could suffer.

Three common types of credit card settlement are:

  • A lump-sum settlement: You negotiate a settlement for less than what you owe, and you pay off the lesser amount in a single payment.
  • A workout agreement: This is where you work out a different debt repayment or loan term with your credit card company. Your credit card company might reduce your interest rate, waive interest for a period, or lower your minimum payment requirement.
  • A hardship agreement: If you suffer a temporary financial setback due to job loss, injury, or a health issue, you might be able to negotiate a lower interest rate or monthly payment during the hardship period.

So, you may be wondering about how to negotiate credit card debt. To do that on your own, pursue your preferred settlement option and make sure you understand exactly what you owe (check balance online or call credit card issuer). Contact your credit card issuer and speak with someone authorized to discuss debt settlements. Explain your financial situation and what you can afford. Be sure to document your conversation and remember nothing is binding unless the agreement is in writing.

It’s also okay to seek outside help (though you should be prepared to pay for professional debt assistance services). If you prefer to hire someone to work on your behalf, a reputable debt settlement attorney or credit counseling program can discuss your potential options.

How can I pay off credit card debt quickly?

There are several strategies you can employ to speed up your debt elimination time table. Here are a few examples.

  • Make more than one payment toward your credit card debt each month.
  • Pay more than the minimum amount due on your credit cards.
  • Use a debt elimination strategy like the debt snowball method or avalanche method.
  • Avoid taking on new credit card debt.
  • Consider consolidating your debt if you can reduce your interest rates

Should I pay off all my debt at once?

To be debt-free is alluring, but, should you pay off all of your debt at once? The answer to that question is complicated.

Paying off debt quickly saves on interest. In the case of credit cards, you can also reduce your credit utilization ratio and potentially improve your credit score.

But, what about opportunity costs? If you eliminate your debt at once, you won't have as much money for emergencies or investments.

With high-interest debts, most financial advisors would advise paying those off aggressively. But with a low-interest rate loan like a mortgage, you might be able to earn more money through investments than you would save by paying off your home loan.

Should I take out a personal loan to pay off credit card debt?

Using a personal loan to pay off credit card debt might be a wise approach. With credit cards you can have numerous accounts with varying balances, interest rates, and payment due dates. If you use a personal loan to pay off your credit card debt, you could have one loan with a fixed interest rate. Having one loan instead of multiple credit cards should make it easier for you to keep track of your payments.

Another benefit of using a personal loan to pay off credit card debt is that you can reduce your credit utilization ratio. As a result, your credit score might improve even while you’re still working to eliminate your debt.

In general, if you can secure a lower interest rate on a personal loan than you’re paying on your credit cards, the strategy may be a good way to manage your debt. But it’s critical not to charge up new balances on your credit cards in the future. If you fall into this trap, you risk digging yourself into a financial hole that’s difficult to escape. You can also take advantage of credit builder programs and/or get a credit builder card to work on improving your credit.

Should I consolidate my credit card debt?

If you apply for a debt consolidation loan, a home equity line of credit, or a balance transfer credit card at a lower rate, debt consolidation can be beneficial. The key is to be aggressive about eliminating your debt even after you combine it together onto a new account.

When your credit card balances return to zero, it can be tempting to charge them up again. If you’re worried you won’t be able to avoid that temptation, consolidating your credit card debt might not be the right move.

Where can I get help with my credit card debt?

No matter how bleak your debt situation seems, it’s possible to find a light at the end of the tunnel. Sometimes asking for professional help can be the best place to start your journey toward debt recovery.

There are several options available if you’re seeking help with your credit card debt. One of the best resources for help may be a reputable credit counseling agency. (Tip: The Federal Trade Commission recommends checking with your state's attorney general and local consumer protection agencies before working with a credit counselor.)

A credit counseling agency can help you with a debt management plan (DMP), budgeting, and more. Make sure the agency is licensed, your counselor is certified, and that you understand how much the services will cost.

With a DMP, you pay the counseling agency and they pay your creditors, minus their fee. Your counselor might be able to negotiate a lower payment and interest charges, along with getting fees waived. This could result in paying off your debt sooner, although DMPs often take three to five years to complete.

Keep in mind some debts may not be eligible for a debt management plan. And you may need to close your credit card accounts as well.

The bottom line is no matter what your credit card debt situation looks like, you have options. If you are uncomfortable going it alone, professional help is available. The only wrong decision in this situation is continuing to ignore the problem.


  1. Person, and Jonnelle Marte. Reuters, "U.S. Demand for Household Debt Climbed in Q2, New York Fed Report Shows." Accessed December 27, 2021.
  2. Experian Insights, "State of Credit 2021: Rise in Scores despite Pandemic Challenges" Accessed December 27, 2021
  3. American Bankers Association, "Credit Card Market Monitor." Accessed December 27, 2021.
  4. Ibid.
  5. Ibid.
  6. The Fed - Consumer Credit - G.19, "Board of Governors of the Federal Reserve System." Accessed December 27, 2021.
  7. Consumer Financial Protection Bureau, "Submit a Complaint." Accessed December 27, 2021.

About the author

Michelle L. Black is a leading credit expert with over 17 years of experience in the credit industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting and debt eradication. See Michelle on Linkedin and Twitter.

About the reviewer

Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.

Editorial Policy

*Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s). *

self logo
Written on April 21, 2022
Self is a venture-backed startup that helps people build credit and savings.

Self does not provide financial advice. The content on this page provides general consumer information and is not intended for legal, financial, or regulatory guidance. The content presented does not reflect the view of the Issuing Banks. Although this information may include references to third-party resources or content, Self does not endorse or guarantee the accuracy of this third-party information. Any Self product links are advertisements for Self products. Please consider the date of publishing for Self’s original content and any affiliated content to best understand their contexts.

Take control of your credit today.