How to Get Out of Credit Card Debt Without Paying It All (Or Ruining Your Credit)

Credit card debt is one of the most common types of consumer debt out there. The average American household owed $8,701 in credit card debt in 2021.

For many people, especially those with multiple high-interest credit cards, paying off this debt is a struggle. Fortunately, if you’re looking for ways to get out of credit card debt, you have options ranging from debt settlement to Debt Management Plans (DMPs).

Evaluate Your Financial Situation

Although it’ll be challenging at first, the first thing you should do is evaluate your financial situation. This means tracking your expenses, totaling up your income, and creating a realistic personal budget.

There are several ways to do this. You can create a spreadsheet, use a notebook, or sign up for a budgeting app like Mint. Whatever the method, keep a careful record of every financial transaction. That way, you can see where your money is going, and you can identify ways to cut back and save.

Along with this, consider your net worth – this includes assets like investment accounts, your home equity, or money in savings.

Finally, calculate your debt-to-income (DTI) ratio. This is the total amount owed each month divided by your gross monthly income. For example, if you make $2,000 a month and owe $1,500, then your DTI ratio is 75%. If possible, try to keep your DTI ratio to 30% or below.

Free Up Cash With a Budget

With a clear understanding of their current financial situation, anyone can rework their finances into a budget that makes sense. Here’s the best way to go about it.

Set a Debt-Payment Goal

Make a goal based on how much credit card debt you want to pay off and in what time frame. Then, create a personal budget that opens up some extra cash so you can reach that goal. The budget should be realistic enough to follow without unnecessary stress or detracting from your quality of life.

If you have multiple credit cards, list each one. Rank them in the order you want to repay them. This could be based on interest, the current balance, a low introductory APR, or anything else. Focus on one debt at a time to avoid getting overwhelmed.

For example, say you want to repay $500 in three months. That’s roughly $166 a month, not including interest. Once you’ve paid it off, move on to the next credit card.

Cut Nonessential Spending

Everyone has fixed and variable expenses. Fixed expenses are generally unavoidable and include anything that remains unchanged each month like rent or auto payments.

Unlike fixed expenses, variable expenses change from month to month. These include things like entertainment, monthly subscriptions, gas, and to a point, groceries. Generally, it’s easier to cut back on variable expenses than it is to lower fixed expenses.

Work Methodically Toward Bigger Wins

When it comes to finances and paying off credit card debt, people often forget about the big picture. However, even small wins like following a personal budget for a month or paying more than the minimum balance on a credit card add up.

Don’t worry if you make a minor financial mistake. Instead, focus on making small, but regular steps towards bigger goals. Make all minimum payments on time, decrease spending where you can, and build up some savings. If your living expenses are still too high, consider getting a roommate to help out.

Remember, every positive step counts towards the bigger financial win.

Be Realistic

Finally, be realistic with your budget and spending. It’s easy to say you won’t go out to eat for an entire month, but it might not be realistic. Try not to cut back so much that you end up giving up as this could reset any progress made.

Choose a Debt Repayment Strategy

Getting out of credit card debt requires time, patience, and persistence. This is especially true if you’ve had a balance for a long time that continues to rack up interest. However, having a solid repayment strategy can help ensure you pay off your cards and stay out of debt.

There are a couple of highly effective ways to pay off your credit card bills and keep your balances low. Remember, these debt reduction methods work best when you stick with them. With that said, here are the best debt repayment strategies, how they work, and who should use them.

The Debt Snowball Method

The debt snowball method is the strategy of paying off the smallest credit card bills first, as quickly as possible.

Make a list of every credit card you use starting with the smallest balance. Ignore interest rates and focus solely on the principal amount owed. Once you’ve done this, set aside as much money as possible towards paying off the smallest debt first. In the meantime, pay the minimums on any other open accounts.

Once the first debt is gone, move on to the next smallest one. Every time you pay off a new account, you’ll be able to make larger payments towards the next one. Continue to pay off your credit cards like this until all balances reach zero and you’re basically debt-free (we aren’t counting many student loans and mortgages, those will take significantly longer to pay off.)

This debt repayment strategy is ideal for those who want to see more immediate progress by paying off existing accounts. Since there are fewer debts to worry about each month, it also makes it easier to keep up with different payment due dates.

The Debt Avalanche Method

With the debt avalanche method, you focus on paying off the debt with the highest interest rate first, regardless of balance. While you do this, pay only the minimum payments on all other credit card accounts. Depending on how much you owe, this method can save you more money on interest charges in the long run. It can also help you get out of debt sooner.

This method is best for those who don’t need to see immediate or major progress as they clear up their debts.

To learn more about the differences between debt snowball and debt avalanche, check out this video:

Pay More Than the Minimum Balance

Unless the card issuer has temporarily deferred payments, every credit card has a minimum monthly payment due. This amount includes the principal balance and interest that’s accrued during that period.

Currently, the average APR on unsecured credit cards is somewhere between 23.14% and 25.8%. That boils down to roughly 1.93% to 2.15% of the total monthly balance. The sooner you get your balances down, the less money you’ll pay in interest fees.

Ultimately, whatever debt repayment strategy you choose, don’t spend too much time worrying about choosing the right one. The key to getting out of credit card debt is to steadily pay down your balances every month. It’s up to you if you go with the highest balance, highest interest rate, or another option.

Set Up a Payment Plan for Yourself

Another effective way to get out of credit card debt is with a credit card installment plan. These are a great way to control spending and reduce credit card debt.

With an installment plan, you make fixed monthly loan payments over a set period – usually between three and 12 months. They sometimes come with administrative fees, though these are generally lower than regular interest. Some even come with a 0% interest introductory period.

Consider setting up autopay so every payment is on time. Just make sure you have the funds in the connected account or there may be overdraft fees.

Get Your Creditors on Your Side

At the end of the day, creditors just want to get their money. They don’t want to harass their customers about making payments, nor do they want to sell or transfer their debts.

One way to reduce or manage your credit card debt is to negotiate with your creditors. If you’re proactive and transparent about your financial situation, they might be willing to lower your interest rate. Or they might provide other resources on how to pay off your debts.

Either way, be prepared to explain why you need help and what steps you’ve already taken to improve your finances.

Credit Card Debt Relief During COVID-19

During the height of the COVID-19 pandemic, many major credit card issuers offered credit card debt relief to borrowers. These programs often included more flexible repayment plans, deferred interest, and lower monthly payments. They were available to those who’d lost their job or couldn’t make payments due to the pandemic.

There aren’t as many protections in place for credit card users now, but it doesn’t hurt to contact your issuer and ask. You can find your credit card issuer’s contact information on their main website.

Find Help If You Need It

People with multiple high-interest cards or high balances can’t always get out of credit card debt on their own. Fortunately, there are many debt-relief options, resources, and tools out there. Before choosing one, however, make sure you fully understand all its implications. That way, you can get the most use out of it.

Top Debt Relief Options

Here are some of the best debt relief options to help you get out of credit card debt.

Debt Consolidation

The concept of debt consolidation is fairly simple. Add up all your current debts — in this case, your credit card balances — and combine them into one loan. This new loan should be just large enough to cover your other debt.

You’ll then take out one larger loan in a lump sum (ideally with a lower interest rate) and use it to pay off your other debts.

With debt consolidation, it’s easier to make payments on time since there’s only one bill due each month. Plus, debt consolidation loans typically have a lower interest rate than individual credit cards, so your payments should be more affordable.

You can also use your home equity to consolidate your high-interest-rate debts by refinancing your mortgage. Most mortgage rates are significantly lower than anything you’re paying a creditor.

When done correctly, you can take the amount saved from interest and apply it to other debts to pay them off faster.

0% Balance Transfer Credit Card

Credit cards have a few advantages. If you have excellent credit, consider applying for a 0% balance transfer credit card. These cards let you transfer the balance from another credit card to it. Depending on the card issuer, the 0% APR period will last between 6 and 18 months.

Most of these cards come with a balance transfer fee of around 3% to 5% of the transferred amount. Some issuers will waive this fee, though.

The benefit of getting one of these cards is that it gives you more time to repay your debt without worrying about interest. This is best for people who can regularly make their payments and repay the balance before the introductory period ends.

Personal Loans

A personal loan can be a great way to handle credit card debt, especially if you owe a larger amount. You can use the funds for nearly anything, including debt consolidation. To qualify for the best rates, you’ll need great credit, solid credit history, a stable income, and a low debt-to-income ratio.

One way to improve your approval odds is with a secured personal loan. These require you to put something up, like a paid-off vehicle, as collateral. This is riskier to the borrower since you could lose the asset if you default on the loan. However, it poses less risk to the lender, which is why they’re more willing to work with borrowers with poor credit.

Generally, personal loans are best for those who can prequalify for an interest rate that is lower than what they’re currently paying on their credit cards. That way, any extra money can be used to pay back more of the principal balance rather than the accrued interest.

Credit Counseling

Credit counseling is another great option for getting out of credit card debt. It’s generally offered through nonprofit organizations. These organizations employ highly trained, certified credit counselors to help consumers manage their finances.

Many agencies offer budgeting tools, financial resources, and debt management plans (DMPs). If you’re interested in finding a nonprofit credit counseling agency in your state, check with the Financial Counseling Association of America.

Debt Management Plans (DMPs)

A credit counseling agency can help you set up a Debt Management Plan. These plans let you combine several credit cards into one monthly payment plan, usually at a lower interest rate.

The agency will work with your lenders and creditors to negotiate your balances or create a new payment plan that works better with your budget. Once an agreement has been reached, you’ll start paying the agency in monthly installments until the accounts are fully repaid. They’ll then disburse the money to your creditors. This usually takes 3 to 5 years.

There are several other advantages to DMPs, besides paying off debts. For one thing, the agency can help prevent creditors or debt collectors from harassing you about payments. For another, the plan can help you get any delinquent accounts current and reduce the risk of late fees.

If you go with this option, you might have to close any credit card accounts that are included in the DMP. This could temporarily affect your credit score since it will lower your available credit. You might also have to pay a small startup or monthly fee to the agency. This fee is usually less than $50.

Debt Settlement

Some for-profit businesses offer debt settlement plans to help consumers get out of debt. This method is a little riskier than others, but it can pay off.

With debt settlement, a company works with your credit card companies and other creditors to try to get your debts reduced (settled) for a lower amount. While they do this, you’ll need to start setting aside money each month in a dedicated account to cover your debts.

Creditors are not required to agree to debt settlement, so this option does not always work. However, you could see up to an 80% reduction in your total debts if all goes well.

During the process, the company might advise you to stop making monthly payments on your credit cards. This could result in late fees or accounts in collections, which will affect your credit score. However, once the process is complete, you’ll be able to get your debts and credit back on track.

Keep an eye out for potential scams with debt settlement companies. Research the company thoroughly before signing up for anything, and avoid any companies that make guarantees.


If nothing else works, consider bankruptcy as a possible last resort. Filing for bankruptcy will stay on your credit report for 7 to 10 years and severely damage your credit score. However, if you’re drowning in debt and already have poor credit, this could be a way to start fresh.

There are two main types of bankruptcy you could file for:

Chapter 7

With a Chapter 7 bankruptcy, you can get most unsecured debts discharged. However, you might lose some of your assets to repay creditors. To qualify, you must have a low income.

Chapter 13

With a Chapter 13 bankruptcy, you’ll have 3 to 5 years to pay off any debts via a repayment plan. This allows you to keep your assets, such as a house or vehicle. It’s best for those with a steady income.

When filing for bankruptcy, you might also be required to attend credit counseling or financial education classes.

Build Your Financial Resilience

Getting out of credit card debt is one thing. Staying out is another.

One of the most important things you can do for your current and future finances is to start building up better habits. This also means eliminating any bad habits that caused the original debt to get out of hand. These habits include:

  • Overspending on unnecessary expenses, no matter how small
  • Living above your means (ex. purchasing an expensive house or car)
  • Taking out debts that are too large or too expensive to repay

One way to avoid most of these issues is with a good personal budget. However, spending less isn’t the only way to improve your financial resilience. Once you’ve got a handle on your credit card debt and monthly bills, reevaluate your income, expenses, and savings goals.

Every couple of months or so, look for areas you could optimize your finances for further stability. Look for ways to earn more cash, establish an emergency fund, and learn how to invest for solid returns. All of these methods will help you get out of credit card debt faster.

If getting out of debt seems impossible, check out this story from Bankrate about a couple who paid off more than $27,000 in debt in 17 months.

The Bottom Line

With a solid debt repayment plan and a little help, you can get out of credit card debt and stay out of it. Start by taking a good look at your financial situation – that is, your income, expenses, and goals. From there, start working on paying off your debts one at a time.

After you’ve tried everything else, consider another option such as debt consolidation, credit counseling, or debt settlement.


How Can I Check My Credit Report?

You can obtain a copy of your credit report from all three credit bureaus — Experian, Equifax, and TransUnion — from Or, you can get it from the bureaus directly.

What Does It Mean to Have Good Credit?

Your FICO credit score ranges from 300 to 850, so a good credit score is 670 to 739. With good credit, you can qualify for more loan products and credit cards with lower interest rates and better terms. Good credit also gives you access to higher limits and increases your approval odds for apartment leases and certain jobs. If you don’t know your credit score, here are free ways to learn your number.

Can I Go to Jail for Not Repaying My Credit Card Debt?

No. Your debt collectors cannot take you to criminal court, but they can take you to civil court. This could mean garnished wages and damaged credit. However, it will not result in jail time. However, it is possible to end up in jail for another reason, like ignoring a judge’s order.