Credit card debt

Paying off your credit card balance

If you have credit card debt and are only making the minimum monthly repayment, it can feel never ending. This is because the minimum repayment might be only a little higher than the interest each month so the amount you owe will reduce very slowly.

Tips on tackling your credit card debt

• Stop using your card! If you really want to clear your debt, you need to stop adding to it.

• Pay off as much as you can each month so that you reduce your debt as quickly as possible. If you are only making the minimum repayment each month it’s going to take you a long time to pay off your balance. Even if you can’t afford to repay your debt in full each month, paying more than the minimum payment could help you reduce the time it takes to become debt free. You can use our clearing your credit card ready reckoner to see how increasing your monthly repayments will help you pay off your debt faster.

• Ask your credit card provider if they will consider reducing the interest rate on your card. This will reduce the amount of interest added to your credit card debt each month.

• Think about whether you could switch to a credit card that has a low rate of interest, or 0% interest, on balance transfers. Check out our credit card cost comparison to see what rates are currently on offer. If you are able to move your balance to a credit card with 0% interest for a period of time, then every cent you pay would reduce your debt. Use our clearing your credit card ready reckoner to see if you can pay off your credit card debt faster by switching. Remember, this only works if you repay the balance during the interest free period and you don’t use the card! And if you do want to switch, your new card issuer will look at your credit history, employment status, income and the level of debt you have including any credit card balances that you may wish to transfer.

• Consider reducing the credit limit to an amount you can comfortably afford to repay every month so you are not tempted to use your card more than you can afford to.

• Don't miss repayments or pay later than the due date or you will be charged late payment fees. You could set up a monthly standing order or direct debit for the minimum monthly repayment, or more if you can afford it, to avoid late payments. Late payment fees vary depending on your credit card provider.

• Choose a credit card that you can access online. This will help you keep track of your credit card balance and how much you are spending. Check out our credit card cost comparison to check what fees apply to different cards.

• Try not to use your card to withdraw cash, as interest is usually charged immediately, and can be higher than the rate for purchases. There is also a cash advance fee.

• Review payment protection insurance (PPI). If you have this cover on your credit card, consider whether it’s worth paying for. PPI usually only covers the minimum repayment amount for a limited period of time and is charged as a percentage of your outstanding balance so, the more you owe, the more you pay for it.

• Consider whether a debit card would be a better option for you in the longer term. Alternatively, you could consider getting a prepaid card that can be used for purchases wherever a credit card is accepted.

If you are experiencing difficulty making your repayments and don’t know what to do, you can get help from the Money Advice and Budgeting Service (MABS). If you are considering using a debt management company, there are some issues you need to consider.

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