How to Pay Off Credit Card Debt
Ideas to help you pay down your credit cards as quickly as possible.
How to Get Out of Credit Card Debt:
10 Practical Ways
Struggling with outstanding credit card debt? No matter how bad your situation seems — you’re not alone, and there is a way forward that’s both realistic and achievable.
Whether you’re only making minimum payments, feeling overwhelmed by high interest, frustrated by how out of reach your financial goals feel, or unsure where to start, the good news is that you have options.
Our guide below will walk you through ten practical steps on how to pay off credit card debt and retake control of your financial future.
Need help getting out of debt right away? Contact us for a free appointment with one of our certified credit counsellors.
1. Set a Goal
Start by Setting a Goal You Can Achieve
Paying off credit card debt starts with setting a realistic goal for yourself, especially when you’re tackling high-interest credit cards, multiple credit cards at a time, or other types of consumer debt (overdrafts, lines of credit, vehicle loans, etc.). High-interest debt can feel endless, but creating a structured plan makes a difference. Start by asking yourself:
- How much can I afford to pay each month?
- What’s my target payoff date?
- Which debt repayment strategy will I use?
From there, make your financial goals S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, and Time-bound). For example, instead of simply saying, “I want to pay off my credit card debt,” set a detailed goal like “I will pay off $5,000 in credit card debt within 12 months by committing $417 per month.”
Breaking your goal into smaller milestones makes it easier to track progress and stay motivated. If you’re unsure how to pay off credit card debt efficiently, setting these clear, achievable goals will help you create a structured repayment plan. Regularly review and adjust your goals as needed to keep yourself on track. You can learn more about how to set S.M.A.R.T. financial goals here.
Visualizing where you want to end up makes it easier to figure out what you can do to get there. If you ever feel stuck (and in need of guidance), one of our certified counsellors can help you create a customized plan that works with your timeline.
2. Put Your Credit Cards on Ice
Yes, We Mean That Literally
This might be hard to hear, but eliminating credit card debt means taking your credit cards out of your wallet so you’re not tempted (or even able) to use them. Yes, big goals require big sacrifices, and your financial peace is 100% worth it. Here’s what you need to do:
- Physically separate yourself from your credit cards — store them, or even freeze them in ice if you have to, until you’ve paid off your outstanding balances.
- Use cash or debit for everyday purchases to stay within budget and separate your must-haves from your nice-to-haves. This hack will make you think twice before spending money.
- Remove saved card details from online shopping accounts.
Once your debt is under control, consider keeping just one or two credit cards for necessary or emergency expenses.
3. Prioritize Your Debts
Credit Cards, Loans, Mortgages, etc.
Write down all your debts, including balances, interest rates, and minimum payments. Listing them in order of importance can be vital for your debt repayment strategy. Consider prioritizing your mortgage and vehicle payments since they provide you with shelter and daily transportation for work or school.
Many people target their highest interest rate debts first, and others focus on clearing specific debts, like payday or personal loans, as quickly as possible.
While debt repayment plans can vary depending on the individual, focus on choosing a payment strategy that best fits your financial needs and keeps you motivated to continue marking your debts off one by one. Crossing the finish line into debt freedom is an incredibly rewarding milestone and well worth the journey it takes to get there.
4. Trim Your Expenses
Free Up Some Cash to Pay Debt Faster
Cutting costs can accelerate your debt repayment. To get out of debt fast, start by:
- Tracking your spending for a month
- Identifying areas where you can cut back (e.g., dining out, monthly subscriptions, impulse purchases)
- Using the money saved to make extra debt payments
You might be surprised to learn that making your morning coffee at home instead of buying a $3 specialty drink from your favourite coffee shop will save you over $1,000 a year!
Want to learn more ways to save on monthly expenses? We have tons of ideas on our educational website, MyMoneyCoach.ca. Here are some great resources to get you started:
Struggling with credit card debt?
Get help 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.
5. Create a Monthly Spending Plan
It Will Help You Avoid More Debt
A budget (we know, it’s a scary buzzword) is more than just strict numbers on a page or screen. It’s the foundation for financial security, giving you control, peace of mind, and the freedom to focus on what truly matters.
Plus, having a monthly spending plan ensures you’re living within your means and not above your income, which is where most credit card debt comes from. It should include:
- Routine expenses (e.g. rent/mortgage, utilities, insurance, groceries)
- Debt payments (prioritizing high-interest debt)
- Savings for emergencies, irregular expenses, and future needs
Need help creating a customized spending plan? Try our free interactive budget calculator spreadsheet or learn more about budgeting and where to get budgeting support.
I highly recommend the Credit Counselling Society!
I was hesitant to make this call as I already felt ashamed about my financial situation. I was pleasantly surprised by how understanding and helpful both staff members were that I spoke with. The counselor, CCS gave me great advice and a personalized program to move forward. I highly recommend them!
April
6. Use the Avalanche Method
The Most Popular Way to Get Out of Credit Card Debt – Some Claim It’s the Best
Many people find the Avalanche Method the best way to pay off credit card debt. Why? It minimizes the amount of total credit card interest paid over time. Since interest can feel like a constant drain on your finances, cutting it down helps you pay off debt faster and keep more of your money where it belongs.
Here’s how the debt Avalanche Method works: After covering fixed loan payments (mortgages, vehicle loans, term loans), pay the minimum on lower interest credit cards so that you can put extra money toward the highest interest credit card debt. Once that debt is paid off, roll the payment into the next highest interest debt.
Over time, this method saves money and helps you experience credit card debt relief that much faster.
7. Use the Snowball Method
A Highly Motivating and Popular Debt Reduction Strategy
If you’re familiar with Dave Ramsey, you’ve likely heard of the Debt Snowball Method. This debt repayment strategy is another popular way to pay off debt by tackling small balances first. It creates a powerful psychological boost, helping people stay motivated as they see fast progress. Here’s how it works:
- Pay off your smallest balance first – Focus on eliminating the credit card or debt with the lowest balance, regardless of interest rates. This quick win gives you a sense of accomplishment and sets the stage for even more progress.
- Roll payments into the next debt – Instead of pocketing the money you were paying on the first debt, add it to the minimum payment on the next smallest balance. The more you free up, the faster your payments grow, helping you pay off each balance more quickly.
- Repeat and accelerate – With each debt cleared, your available payments increase, making it easier to tackle the next one. As your momentum builds, debts disappear faster, and your motivation grows with each gratifying win.
Not sure whether the Avalanche or Snowball Method is right for you? Each has its own perks. While tackling high interest debts first is mathematically correct and makes the most financial sense, the psychological benefit of seeing small debts disappear quickly can be just as powerful. Some people thrive on numbers, while others are motivated by feeling accomplished and continually seeing progress. You know yourself better than anyone. Choose the method that best fits your mindset and keeps you moving forward.
When it comes to credit card debt, once you’ve paid off a card, cut it up and close the credit card account. Trust us: Most people only need one or two credit cards.
While closing a credit card that you no longer need could affect your credit score for a little while, it’s better to eliminate credit cards that you don’t need than to keep them open just to have them stay on your credit report. If you have questions about paying off debt, closing accounts, and your credit rating, we’d be happy to answer your questions so that you can decide what’s best for you.
8. Use Savings
This Will Help You Pay Down Debt Faster
Many people contribute regularly to a savings plan, which is great, but that money could help pay down debt faster — or even clear it completely.
Once you have an emergency fund and savings for irregular expenses, consider pausing extra savings contributions until your debt is paid off. This is especially useful if you’re not saving for something specific, like a vacation. And don’t forget to look at your payroll deductions for employer sponsored savings plans or RRSP matching. Match programs are like earning 100% on your money right away, so it’s important to factor those into your budget and overall debt reduction plans.
The interest you save by paying off debt faster will likely outweigh any earnings from a savings account. You can also use income tax refunds, pay increases, or other cash boosts to speed up the process.
9. A Debt Consolidation Loan
A Balance Transfer Could Also be a Good Option
A debt consolidation loan or balance transfer credit card can simplify payments, lower interest rates, and eradicate your credit card debt faster. However, it’s crucial to:
- Read all terms and conditions
- Locate any hidden balance transfer fees
- Avoid new credit card spending, as this will make your debt even worse than before
- Have a plan to repay the consolidation loan in full
However, be cautious – debt consolidation loans aren’t helpful for most people. If you take out one of these loans but don’t change your previous spending habits, you will dig yourself even deeper into debt. You could even double your debt! To get ahead with a consolidation loan, you must make sure you first track your spending for at least 2 weeks. You also need to create a budget and strictly follow it to ensure you’re not spending more than you earn. Don’t become someone who needs another debt consolidation loan to pay off your first one.
10. Refinance Your Mortgage
Consolidate Your Debt With Home Equity
If you own your home, you may have enough equity to consolidate all your debts into your mortgage. However, if your home equity is limited, the added cost of mortgage insurance might mean that you should consider other options. It’s important to explore all of your options and seek advice from an unbiased expert — not just your lender or mortgage broker, who has a vested interest in your decision. Carefully consider the following:
- Increased mortgage payments could impact your budget
- Extending your mortgage amortization will likely result in higher long-term costs
- Home equity should not be a repeated solution for debt problems
Like with a debt consolidation loan, rolling debts into your mortgage requires a solid budget. Without one, you may find yourself tempted to borrow again whenever an “emergency” arises. This is especially true for those who have a re-advanceable mortgage, like a HELOC (home equity line of credit). In fact, treating your home like an ATM can leave you with significant debt, few assets, and little to no savings by retirement.
If traditional banks and credit unions can’t help you with refinancing your mortgage, avoid rushing to a home equity lender. Instead, speak with one of our credit counsellors. At the Credit Counselling Society, our credit counsellors can help you explore all your options and create an effective plan to pay off your credit card debt and loans— potentially without having to rely on your home’s equity.
Last Updated on April 7, 2025
An Additional Option
If you’re working hard to improve your finances but finding it tough, you’re not alone. There may be more options available than you realize. We’ve created a simple, insightful tool to help you explore potential solutions. Just answer 9 quick questions, and you’ll receive personalized options that could make a real difference in your journey to financial peace.
Find Out What Options May Be Available to You
by Answering 9 Simple Questions
Just answer these easy, multiple-choice questions to get a look at your potential options. Within a few minutes, you'll be looking at summarized options and results that apply specifically to your situation.
Discover Your Options
A Visual Overview of Possible Options
Here are some options that may be available to you based on the information you have provided about your financial situation. The most likely options are in green, less likely in yellow, and least likely in red. This is only intended to provide you with a general idea of the options that may be available to you. A credit counsellor will need to go over your information in much more detail to make a more precise determination.0
Option
Do a Deeper Dive to Uncover More Options
It looks as though your situation requires more in-depth analysis from a trained credit counsellor. They can help you optimize your budget, explore options, and create a plan to get back on track.
0
Option
Self-Managed Solution
After thoroughly exploring your options with a credit counsellor, they can help you put together a plan to get out of debt in a reasonable amount of time. You can then implement this plan on your own.
0
Option
Debt Consolidation Loan
Based on the information you've provided, it appears as though this could be a possibility if your credit score is strong enough.
0
Option
Debt Management Program
It appears as though this may be an option for you. A Debt Management Program eliminates or drastically reduces interest and consolidates all payments into one.
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Option
Consumer Proposal
This may be an option for you to consider. It's a legal process that consolidates all payments into one. Talk to a credit counsellor about this and see if it makes sense for your situation.
0
Option
Bankruptcy
Based on the information you've entered, it appears as though bankruptcy may be an option to resolve your financial challenges. You should speak with a credit counsellor about this and make sure you've exhausted all other options first.
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Option
Orderly Payment of Debts
Based on what you've entered, it looks as though an Orderly Payment of Debts (OPD) program may be an option for you. To find out if this would make sense for your situation, you should speak with a credit counsellor.
0
Option
Voluntary Deposit
Based on the information you've provided, it looks as though a voluntary deposit program may be an option to address your debt situation.
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Bonus Option
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Personalized tips for paying off credit card debt
If you’re overwhelmed by your current financial circumstances or have difficulty maintaining a monthly budget, we can help you by providing personalized tips for paying off credit card debt. We’ll review your financial situation with you and explore all the different ways you can get rid of your debt. There are even debt relief and debt repayment programs that might help.
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Credit Counselling
Are you curious about what credit counselling is or how it works? Here’s what you need to know.
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