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11 Ways to Pay Off High Interest Credit Cards

If your goal is to pay off high interest credit cards, the first—and perhaps hardest—step is to avoid adding to your debt. From there, explore strategies to lower your interest rates, direct more money to payments and get expert help if you need it.

From the second quarter (Q2) of 2015 to Q2 2019, credit card debt in the U.S. grew 31%, according to Experian data. The number of new credit card accounts jumped nearly as much (24%) in that time. If you're one of the many consumers overwhelmed by credit card debt at high interest rates, know that you have options—and that seeking out guidance means you're on the right track.

Here are 11 ways to pay off high interest credit cards.

1. Try Paying With Cash

When used wisely, credit cards can help you build a strong credit score, and can give you access to valuable rewards. But it's not wise to use one if you can't pay off your balance each month. Otherwise, interest will pile up, and you'll be at risk of feeling discouraged by a growing balance.

If you're carrying debt, your first course of action should be to pause your credit usage and switch to using cash. This will keep you from going into further debt and it may affect your spending behavior for the better. The physical act of using cash could make you second-guess big purchases more often than using a credit card would. If you'd rather not carry cash, use your debit card instead.

2. Consider a Credit Card Balance Transfer

A smart way to use a balance transfer is to move credit card debt from a high interest card to one that offers a promotional 0% annual percentage rate (APR) period, typically 12 months or longer. That means you have the opportunity to pay down debt without incurring more interest, as long as you eliminate your debt by the time the promotional period ends.

You may be charged a balance transfer fee, which is a percentage of the transferred balance, and you'll generally need good or excellent credit to qualify. Note, too, that you won't be able to move debt between cards issued by the same financial institution.

But a balance transfer can lead to big savings. Say you have $5,000 in debt on a card at 18% APR. If you wanted to pay it off in 12 months, you'd pay $458.40 per month and $500.80 in interest. If you transferred the balance to a card with 0% APR—and opted for a card with no balance transfer fee—you'd pay $416.67 per month and $0 in interest.

3. Pay More Than the Minimum Amount Due

To get rid of debt on a faster timeline, it's crucial to pay more than the minimum payment your credit card issuer assigns you. Your minimum payment is typically a fixed amount, such as $25 or a small percentage of your balance, likely 1% to 3%. Making only that payment will typically keep you in debt for longer than you might prefer.

When you're focused on knocking out debt, paying extra helps reduce your principal balance, which, in turn, means you'll be charged interest on a lower amount. Anything you pay beyond the minimum is helpful. You may find motivation in calculating how much faster you could pay off your debt if you send an additional $25, $50 or more to your balance per month.

4. Lower Your Expenses

It can feel impossible to pay down debt when you don't have cash to spare. That's why a crucial step in the payoff process is to look for ways to save money. That might mean tracking expenses for a month or two and identifying places where you can cut back.

For instance, if your cellphone bill is one of your costliest recurring expenses, ask your provider if it offers new plans—even prepaid ones—that give you equivalent service for less money. Another common source of debt is food, so you could also consider instituting a plan to regulate how much you spend on dining out. Plan to cook more meals yourself and minimize what you spend when you do dine out with others.

Any money you save from these changes can go into an account you use to pay off credit card debt. If you lower your cellphone bill from $80 to $60 per month, for instance, set up a recurring transfer for $20 per month to your paydown account, and make extra credit card payments from there.

5. Increase Your Income

Aside from reducing expenses, you also can add to your income and put that money toward credit cards. Think about tapping into the sharing economy to make extra cash through services such as Airbnb. Or leverage your skills and work as a freelancer or consultant in your free time.

6. Sell Your Old Stuff

Decluttering gives you the opportunity to streamline and update your space—and you can apply any money you make to credit card debt.

Sell used clothes at local thrift or consignment stores, or online through services like Poshmark and ThredUp. You can also sell used electronics on a marketplace like Swappa. Miscellaneous items and furniture are good candidates for Facebook Marketplace, Craigslist or eBay.

7. Ask for Lower Interest Rates

While it may seem intimidating, you might have luck asking your credit card issuer for a lower interest rate. If you have a history of making on-time payments, and you've been a customer for a number of years, you're more likely to get a positive response.

You can provide reasons for your request, including the fact that you're experiencing a financial hardship, or mention that you've received offers from competing card issuers at lower rates. If the issuer says no, ask for a temporary rate reduction instead. This can be a useful alternative if you don't qualify for a balance transfer credit card but you'd like to pay off the debt at a lower rate over a fixed period of time.

8. Pay Off High Interest Credit Cards First

If you have debt across multiple credit cards, the balance on the card with the highest rate is the most expensive to keep. Aim to pay it down first with any extra money you save or earn, an approach called the debt avalanche. Once that balance is gone, you'll apply the extra amount you paid to the card with the next-highest interest rate.

Here's how it works. Say you have a credit card with a $3,000 balance at 17% APR and another with a $2,000 balance at 12% APR. If you pay off the higher interest card within six months instead of 12, you'd save about $133 in interest. By contrast, targeting the lower interest card would save you just $62 in the same time frame.

9. Look Into the Snowball Method

You might decide, however, that it's more exciting to pay off the $2,000 balance first, which could motivate you to maintain your payoff plan. If so, use the debt snowball method to get rid of your credit card debt. Instead of focusing on high interest cards, you'll pay off the smallest balance first, then apply extra money to the next-smallest balance.

10. Make Two Payments Each Month

Another way to reduce the interest you pay is to make more than one credit card payment per month. If you're currently paying $50 a month now, try doubling it to $100, and attempt to make a payment each time you get a paycheck.

An added benefit of this strategy is that it can strengthen your credit score. You won't be at risk of missing a payment, and you'll reduce your credit utilization ratio, which is the amount of available credit in use relative to your credit limit. That's the second most important factor in your credit score, after payment history.

11. Consider Credit Counseling

You don't have to develop a credit card payoff plan and budgeting strategy alone. A certified counselor at a nonprofit credit counseling agency can assess your debt and help you consider which of the approaches outlined here are best for you.

You may be offered the option to use a debt management plan, during which the counselor will negotiate with your creditors to reduce your interest rate, monthly payment or overall balance. But this costs a startup fee and a monthly fee of $20 to $30 on average, and you may be required to close your credit card accounts. Weigh the pros and cons before moving forward.

The Bottom Line

If you're feeling burdened by high interest credit card debt, start small. Make a list of your debts first to understand your current circumstances, then pick just one payoff strategy to try. You can always add on another strategy, or switch approaches, later on.

The important thing is to begin the process as soon as you can. You'll limit the amount of interest you pay, and you can potentially improve your credit score by reducing your credit card balances, and therefore your credit utilization ratio. But perhaps more important, you'll feel empowered knowing you're making an effort to live debt-free, at last.