How to pay off your credit card debts

Updated on 17 July 2014

How to destroy your credit card debt quickly and effectively.

Cut the cost of your debts

Get a 0%  balance transfer credit card
If you’ve got a lot of debt on your credit card and it's earning a chunky rate of interest, it’s time to reduce it! Transfer your debt onto a 0% balance transfer credit card and you won't pay any interest on the balance for a set period.

Just make sure you've either paid off your debt by then, or managed to switch it to another 0% card.

Compare 0% balance transfer credit cards with lovemoney.com

Get a lifetime deal
If you think you might not be able to clear your balance that quickly, transfer your debt to a lifetime balance transfer card instead (also known as low APR cards). This type of credit card offers a low rate of interest for as long as it takes you to clear your balance.

Just remember that you're still paying interest, so it's important you clear your debt as quickly as possible.

The benefit of this type of card is that you don’t have to keep switching cards every year or so, and you don’t need to worry about your rate still increasing. That means less hassle – and less to pay in fees.

Finally, if you are struggling to get rid of your debt, and need a few hints and tips on how to get into the habit or what to cut back to give you that extra bit of cash each month, why not ask a question using our Q&A tool? You may find that other members of lovemoney.com have experiences they can share which will help you.

Get organised

Prioritise your debts
Generally speaking, it's better to prioritise paying off your debts over saving. This is because the interest you accrue on your savings will almost invariably not cover the interest you are paying on your debt.

Even if you’ve got a 0% card deal, this won’t last forever; so you need to throw all your spare funds at it before the 0% period ends.

Budget
If you make savings elsewhere, you’ll have more money to help pay off your credit card debt. So sit down and work out exactly what your monthly outgoings and earnings are. You can do this by using our free MoneyTrack tool. If you register your accounts, every time you make a purchase – no matter which bank account or credit card you use – the tool will record it for you, and then allow you to categorise all your transactions so you know exactly what you're spending your money on every month.

Then work out where you can make cut backs – could you socialise less often or lower your food bills? Any savings you make, start putting towards your debts. You can set yourself a budget by using the lovemoney MoneyTrack budgeting tool, which allows you to set a monthly budget for any specific category (such as petrol and fuel). You’ll then be able to track your progress through the month against the budget you set.

Read our guide How to set a budget and stick to it for more top tips. 

Set up a monthly standing order
It's always a good idea to set up a monthly standing order for your minimum monthly repayment to ensure you remember to make a payment each month.

One slip and you could be charged a fee, lose your 0% deal, and possible get a black mark on your credit record.

Seek free advice

Remember, if you’re struggling with your debts, you don’t have to deal with it on your own. There are plenty of places that will offer you free advice and help you to get your finances back on track - these include StepChange Debt Charity, National Debtline, Advice UKPayplan and Citizens Advice.

So if you’re wondering where to turn next, it's well worth giving one of them a call.

Finally, if you are struggling to get rid of your debt, and need a few hints and tips on how to get into the habit or what to cut back to give you that extra bit of cash each month, why not ask a question using our Q&A tool? You may find that other members of lovemoney.com have experiences they can share which will help you.

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