Credit Cards

Purchases made on plastic add up more quickly than you think.

How To Pay Off Credit Cards as Quickly as Possible

by Stacy Yanchuk Oleksy

If you’re looking for how to pay off credit cards on your own and get out of debt, you’ve made a great choice! Here’s a quick, down and dirty run through of two credit card payoff strategies to help pay off debt as quickly as possible. But before we get into that, you need to make a few decisions about your credit cards if you want to pay them off.

Decisions to Make Before You Begin Paying Off Your Credit Cards

Are You Going to Continue Using Your Credit Cards While You Pay Them Down?

The first decision is whether to use your credit cards while you’re paying them off. My advice is don’t! I know that’s a tough thing to ask when it’s easy, convenient, and available. But you need to make a decision on whether you want easy / convenient / available or you want it paid off. You can’t have both. My recommendation is to put it away someplace safe. Consider putting your credit card in a plastic bag, filling it with water and then freezing it. If you “need” to use it, you’ll have to wait for it to thaw because microwaving it will create a light show that your neighbours won’t want. You can also lock it up, or give it to someone you trust for safe keeping.

Where Will the Money Come From to Pay Off the Debt?

The second decision you need to make is where the money will come from to pay off your credit card. Will you earn extra income to pay it off? Will you reduce some expenses and use that extra money for payments? Will you sell something? Regardless of where the money comes from, know how much you can put towards your payment on a monthly basis.

Related: MyMoneyCoach.ca has a great list of 10 places to find money for whatever you need it for. Check out their list and see if you can find some money to pay off your credit cards faster.

Why Are You Doing This?

And the third, which I think is the most important to helping you stay the course, is why you’re doing it. You need to become crystal clear why you want to pay off your credit cards so that you follow through, pay them off and keep them paid off. Instead of focusing on the negative, what you don’t want like stress, high payments, etc., focus on the positive, on what you do actually want. Some examples could include: I want to pay off my debt so I can feel peaceful around money and credit; I want to become debt free so I can travel, save for a home, my children’s education.

Prepare for Winter!

Okay, now that you’ve made some decisions, let’s talk about Winter. Winter, you ask? Not to steal from Game of Thrones, but winter is coming. And what I mean by that is when it comes to how to pay off credit cards, you can choose the snowball or avalanche method. Hopefully my less than funny winter and GoT references make sense now (nudge, nudge)!

The Snowball Debt Repayment Method

The snowball method for paying off debt looks like this: list out each credit product you have, from lowest balance to highest. Make minimum payments on all products except for the one with the lowest balance as this is the one you’ll focus on. Let’s say you have four (4) credit products (credit cards, line of credit, or overdraft). We’ll call them A, B, C, and D. Take all of your extra money and put it onto product A, while making minimum payments on products B, C, and D. Keep this going until you have paid off product A. Then take all of the money you were putting on product A and now put it onto product B while making minimum payments on products C and D. When B is paid off, move everything over to C until it’s paid off. And finally, put everything you’ve got available on product D until it’s paid off.

The Avalanche Debt Repayment Method

The avalanche method for paying down credit card debt looks a little different. List out each credit product you have from highest interest to lowest. Let’s again say you have four (4) credit products (D, C, B, and A). Take all of your extra money and put it on product D, the one with the highest interest, while making minimum payments on C, B, and A. Once D is paid off, take the money and put it on the next highest interest product (C), and keep going until all products are paid off.

The Best Way to Pay Off Credit Card Debt and Get Out of Debt

You may ask which option is better – which option is the best way to pay off credit card debt fast and get out of debt quickly? I would suggest that you go with the one that feels the easiest and most doable. When it comes to money, it’s so much more than dollars and cents, it’s about feelings, confidence, experience, history, and practice. The avalanche method may be the most logical option; however, if it feels like it’s going to take forever (insert eye roll here), then go with the snowball method, where you’ll get quicker wins.

Regardless of what you choose for how you’re going to pay off your credit cards, choose something because inaction will just get you further into debt. And if you’re lost, need advice, or even a cheerleader, call us and we can help you.

Struggling with credit card debt?

Get answers from an expert.

Trying to pay off your credit card debt can feel overwhelming, but you don’t have to do it alone. One of our professional credit counsellors would be happy to review your finances with you, work with you on making a solid budget for successfully repaying your debt, or work you on special debt repayment solutions if they fit your situation. Speaking with our certified counsellors is always free and confidential. 

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