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What Can I Do to Pay Off My Credit Card Debt?

From consolidation loans to spending habits, explore effective strategies to manage and eliminate credit card debt with Consolidation Expert.

Getting buried under high interest credit debt can be overwhelming and stressful for anyone. If your minimum payments are barely making a dent while interest is continuing to accrue, it’s easy to feel trapped.

Fortunately, plenty of options are available which could help you manage your credit card debt and pay it off for good. Whether by adjusting your spending habits, using a balance transfer card, taking out a consolidation loan, or seeking a formal debt solution, there are many ways you can back control of your finances. Just make sure to explore all your options carefully and understand the risks involved.

Key Takeaways:

  • Credit card interest causes balances to grow exponentially if only minimum payments are made.
  • Increasing your payments can help you to pay off your debt sooner. Create a budget and aim to cut back on unnecessary spending where possible.
  • Consolidating your debt, e.g. through consolidation loans or 0% balance transfers, can help to make monthly payments more manageable and save you money in interest.
  • If debt becomes unmanageable, it’s important to seek professional advice and research potential debt relief options.

How Does Credit Card Interest Add Up Over Time?

When you use a credit card, you borrow money from the lender – and if you don’t repay it in full by the due date, you’re charged interest.

Credit card interest rates typically fall between 18-40%, though this can vary depending on factors such as the lender, the card, and your credit rating. This interest compounds daily, meaning you’re charged interest on the interest, as well as the original borrowed amount.

Making just the minimum payment each month typically only covers a portion of the accruing interest and does little to address the principal debt. Any carried credit card balances also incur this high daily interest immediately unless you are within a temporary 0% introductory rate period.

The impact of this is that as the original principal debt amount remains mostly unchanged, you end up owing more and more in interest each month. If you can’t afford to make more than the minimum payment, this debt can quickly snowball into something unmanageable.

How Can I Pay Off My Credit Card Balance Faster?

Rather than paying only the minimum amount due, make it a goal to pay at least 2-3x the minimum payment if possible. This knocks down the principal substantially faster each month, in turn saving substantially on total interest paid over time.

If you want to get serious about eliminating high interest credit card debt, here are some strategies which may help:

01. Temporarily Trim Discretionary Expenses

Understanding your finances and making a budget can help you find ways of curbing your spending, allowing you to pay more towards your credit card debt each month. Make note of your income, essential expenses, and any areas where you can cut out or reduce unnecessary discretionary costs.

For example, it may be cheaper to pack a lunch to bring to work instead of buying lunch every day. You can then funnel these savings directly toward paying down credit card balances faster above normal payments.

02. Seek Additional Income

Consider picking up a second source of income, such as ridesharing, food delivery or online freelancing, and directing these extra funds towards credit card debt repayment. You could also speak with your employer to negotiate a potential raise or explore whether you may make more money by changing jobs altogether. Increasing your income even by a small amount each month could make all the difference.

03. Negotiate with Your Credit Card Company

If you’re having financial difficulties, call your credit card company directly and explain the situation. They may be able to waive certain fees or offer a lower ongoing interest rate, especially if you explain that you’re considering transferring the balance to a competing 0% balance transfer card.

04. Consolidate Your Credit Card Debt

Consolidating existing credit card balances means combining them into a single loan, hopefully at a much lower fixed interest rate. This can help prevent debt from accruing as quickly by minimising the compound interest effect. The two main ways of doing this are:

  • Transfer your credit card balances onto a new 0% balance transfer card
  • Take out a personal consolidation loan

Before doing this, it’s important to carefully weigh up the potential risks and benefits according to your unique financial situation.

Should I Take from Retirement Savings to Pay Off Credit Cards?

Tapping into retirement savings to pay off credit card debt is a decision that should be approached with caution. In the UK, there are specific rules and implications for accessing funds from pensions and ISAs.


  • Early Access: Generally, you can only start taking money from your pension once you reach the age of 55. Accessing your pension before this age, unless in exceptional circumstances, can result in significant tax penalties.
  • Tax Implications: When you take money out of your pension, 25% is usually tax-free, but the rest is taxed as income. This means that if you withdraw a large amount in one go, you could find yourself pushed into a higher tax bracket.
  • Loss of Compound Growth: By taking money out of your pension early, you lose out on the potential compound growth that could have been earned on that money, reducing the size of your pension pot in the long run.

ISAs (Individual Savings Accounts)

  • Flexibility: ISAs offer more flexibility than pensions. You can withdraw money from an ISA at any time without losing tax benefits. However, the amount you can pay into an ISA in a tax year is usually limited, which is a consideration if you withdraw and then want to put money back.
  • Loss of Tax-Free Interest: Withdrawing money from your ISA means you'll miss out on future tax-free interest or growth on that amount.

Given these considerations, it’s usually not advisable to use retirement savings to pay off credit card debt. The potential tax implications and loss of future growth can outweigh the benefits of clearing the debt.

You could consider other options like debt consolidation, which might offer a more cost-effective solution without disturbing your retirement savings. Only use retirement funds as an absolute last resort, and always consult with a financial advisor before making such a decision.

How Do 0% Balance Transfer Cards Work to Lower Interest?

Balance transfer cards allow you to consolidate multiple existing credit card balances into just one account. Typically, you’ll benefit from an introductory 0% interest rate which prevents further interest accumulating for a short promotional period. Here’s how it works:

  • You open a new balance transfer card and submit requests to transfer specific existing card balance(s) over to the new card.
  • You then make payments toward the principal on the new consolidated balance during the 0% introductory rate term (typically 12 months).
  • This interest-free reprieve allows you to focus on debt paydown each month, rather than dealing with accumulating interest.

When used responsibly, 0% balance transfer cards provide worthwhile temporary interest savings and consolidation while you tackle repaying credit card debt principal.

However, be aware that most balance transfer cards charge a one-time balance transfer fee, usually calculated as a percentage of what you owe. Additionally, once the promotional period ends, you could end up paying a high rate of interest again – and any additional spending on your new card is usually subject to interest immediately.

Could a Consolidation Loan Help Me Pay Off My Credit Debt?

Consolidation loans allow you to combine multiple high-interest credit card balances into one personal loan. Once approved for the loan, you’ll receive a lump sum which is used to repay each of your creditors in full. You’re then responsible for one fixed repayment per month until the debt is cleared.

Debt consolidation loans can be particularly useful for individuals with multiple credit card debts or other non-priority debts, such as payday loans. They may be able to help you pay off your credit card debt by:

01. Lowering the Interest Rate

One of the main advantages of a consolidation loan is the potential for a lower interest rate compared to the average rate on your credit cards. A lower rate can save you money in interest over the life of the loan and help you pay off your debt faster.

The rate you’ll be able to get on your consolidation loan will depend on the provider, the type of loan (e.g. secured vs. unsecured) and your credit rating. It’s important to shop around to find the best deal.

02. Simplifying Your Payments

With a consolidation loan, there is only a single fixed monthly loan payment to manage. This means you won’t have to juggle multiple credit card payments with various due dates, amounts and interest rates. This can make budgeting easier and help reduce the risk of missed or late payments.

03. Providing a Fixed Loan Repayment Term

Unlike credit cards, which can have perpetually rolling balances if only minimum payments are made, a consolidation loan has a fixed repayment term. This means you’ll know exactly when your debt will be paid off, and can plan accordingly.

Most consolidation loan providers offer terms of between one and five years, though this can vary depending on several factors. Opting for a longer term can reduce your monthly repayments, making your day-to-day finances easier to manage.

Are There Any Downsides to Credit Card Consolidation Loans?

A consolidation loan can be a valuable tool for managing and paying off credit card debt. However, it’s essential to crunch the numbers and consider whether it’s the right solution for your personal situation. Some things to consider include:

  • Fees: Some consolidation loans may come with origination fees or other costs. It's essential to factor in these fees when determining if the loan is cost-effective.
  • Interest Over Time: While a longer loan term might offer lower monthly payments, it could also mean paying more in interest over time. Aim to find a balance that fits your budget and minimises interest costs.
  • Secured vs. Unsecured: Some consolidation loans are secured, meaning they require collateral (like your home). While these might offer lower interest rates, they also come with the risk of losing the collateral if you default on the loan.
  • Potential Impact on Credit Score: Applying for a consolidation loan typically involves a hard inquiry on your credit report, which can temporarily lower your credit score. However, making on-time payments and reducing your credit card balances can have a positive long-term impact.

Before applying for a credit card debt consolidation loan, compare products from different lenders and ensure you can comfortably afford the monthly repayments. Always read the terms and conditions carefully.

What Credit Card Debt Relief Options Are There?

If your credit card debt remains stubbornly high and feels emotionally and financially unmanageable, there are several credit card debt relief options available in the UK. For example:

  • Debt Management Plan (DMP): An informal agreement to repay debts over an extended period through a licensed company.
  • Individual Voluntary Arrangement (IVA): A formal agreement to pay back your debts over 5-6 years. Any unpaid debts included in the IVA are then written off.
  • Administration Order: Allows you to make monthly payments through your local court if there's a judgement against you, which is distributed to your creditors.
  • Debt Relief Order (DRO): Suitable for those with low income and debts under £30,000, it writes off debts after one year if you can't afford repayments.
  • Bankruptcy: A last-resort option where control of assets is handed to a court official. Your debts will be written off, but with potentially significant long-term consequences.

Be aware that these options are not suitable for everyone, and may come with their own set of potential risks and downsides. If in doubt, seek professional debt advice.

How Can I Avoid Falling Back into Credit Card Debt?

As well as taking steps to repay your credit card balances, it’s equally important to avoid falling back into debt again. This requires a combination of discipline, financial planning, and a change in spending habits.

Focus on making permanent beneficial lifestyle changes, such as developing and utilising a strict budget. This will provide a clearer understanding of where your money goes each month, and help you to identify areas where you can cut back. Try to build up a small savings fund to provide a financial cushion in case of emergencies, so you don’t have to rely on credit.

Breaking impulsive credit card spending habits is another crucial step. It’s wise to shop only for genuine needs and avoid unnecessary purchases wherever possible. If the temptation to spend is strong, consider cancelling your cards once you’ve cleared your debt – just be aware that this might affect your credit score.

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Take Control of Your Finances with Consolidation Expert

Credit card debt can snowball quickly due to interest compounding over time. But by controlling your spending, consistently paying more than the minimum and taking action to reduce interest rates, there is a potential way out.

At Consolidation Expert, we have experience in helping people across the UK to manage and consolidate their debt. Our lenders offer consolidation loans from £5,000 to £75,000, with interest rates and repayment periods tailored to your circumstances.

Take the first step towards financial freedom with Consolidation Expert. Fill in our online application to review your debt consolidation loan options.

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Representative 14.8% APR

We are a broker, not a lender.

Representative Example: Borrowing £15,000 over 60 months, repaying £355.28 per month, total repayable £21,316.57.

Total cost of credit £6,316.57.

Interest rate 14.8% (variable).

The lenders on our panel offer loans for 12-360 months, with rates from 4.7% APR to 42.6% APR.

The Representative Example is based on all loans paid out by lenders between 1st Jan 2022 and 31st Dec 2022.

Further reading

Read Is it Possible to Consolidate Short-Term Same Day Loans?
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Read Can I Consolidate Holiday Loans with Other Debts?
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Read How Can I Pay Off My Debts Faster?
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