How to pay off credit card debt
Last updated: 2026-08-14
Take a $5,000 balance at 22% APR. Pay a fixed $150 a month and it clears in about 52 months, costing roughly $2,800 in interest. Pay the minimum instead and the same balance can take decades.
The starting payment is nearly identical. What differs is whether the payment falls as the balance does.
Why 22% is so punishing
An annual rate of 22% is about 1.833% a month, charged on whatever you owe. On $5,000 that is $91.67 of interest before a single dollar reaches the balance.
Pay $150 and only $58.33 reduces the debt. Pay $100 and just $8.33 does. Pay $91.67 and the balance never moves at all, no matter how long you keep paying.
| Monthly payment | To interest | To balance | Months to clear |
|---|---|---|---|
| $100 | $91.67 | $8.33 | ≈255 |
| $150 | $91.67 | $58.33 | ≈52 |
| $250 | $91.67 | $158.33 | ≈25 |
Note how non-linear that is. Going from $100 to $150 — half as much again — cuts the payoff from about 21 years to about 4. Near the interest-only threshold, small increases in payment produce enormous changes in outcome.
What the minimum payment actually does
A typical minimum is around 2% of the balance, or a small floor amount, whichever is greater. On $5,000 that is $100 — and at 22% APR, $91.67 of it is interest.
Worse, the minimum recalculates each month. As the balance falls the required payment falls with it, so the amount reaching principal shrinks just as you start making progress. The design keeps the account current indefinitely; it is not built to clear the debt.
Fixing your payment at today's minimum and never reducing it is the single highest-value change available on card debt, and it costs nothing extra in month one.
Which card first
With several balances, two orders are commonly used. Highest rate first costs the least in interest and is mathematically correct. Smallest balance first costs slightly more but clears accounts sooner, which some people find easier to sustain.
The gap between them is usually smaller than the gap between following either plan and following none. Pick the one you will actually finish.
One thing that undoes all of it
Continuing to spend on the card while paying it down. New purchases are added to the balance that interest is charged on, and on most cards you lose the interest-free grace period on new purchases entirely while a balance is carried. The payoff plan then runs against a moving target and the schedule never arrives.
Model your own balance
The credit card payoff calculator works a fixed payment through to the clearing date. The minimum payment calculator shows the declining-payment path for comparison, and the balance transfer calculator tests whether a promotional rate beats the fee.
Related reading: fixed payment vs minimum payment.
Avalanche against snowball on the same debts
The two strategies differ in order, not in effort. Here are three cards cleared with the same $600 a month.
| Method | Order cleared | Time to clear all | Total interest |
|---|---|---|---|
| Avalanche | 26% card, 19% card, 15% card | About 30 months | About $3,400 |
| Snowball | $2,000 card, $5,000 card, $8,000 card | About 30 months | About $3,600 |
| Difference | — | Roughly the same | About $200 |
The arithmetic gap is smaller than the debate suggests. Avalanche wins on cost; snowball wins on the first card disappearing sooner. The strategy you finish beats the strategy that is optimal on paper.
Common questions
Avalanche or snowball?
Avalanche pays the highest rate first and costs less in total. Snowball clears the smallest balance first and produces visible wins sooner. Avalanche wins on arithmetic; snowball wins on the number of people who actually finish.
Should I close a card after paying it off?
Usually not immediately. Closing reduces available credit and raises utilisation, which can lower your score. Keeping it open and unused generally helps, unless it carries a fee.
Does a balance transfer help?
It can, if you clear the balance within the promotional window and the transfer fee is smaller than the interest avoided. If the balance survives the promotion, the revert rate usually undoes the benefit.
How long will it take?
That depends almost entirely on how much above the minimum you pay. Minimums are designed to extend the balance for years; even a modest fixed payment above the minimum shortens it dramatically.
Related reading
The rest of this series, and the calculators that let you run the idea on your own numbers.
More debt payoff guides
Try it with your figures
See also all guides, every calculator, and the calculation methodology behind these estimates.