How To Pay Off Credit Cards

Paying Off Credit Card Debt

Credit cards are an extremely popular finance choice and feature in nearly everyone’s debt makeup.

Often, people acquire credit card facilities under the assumption they are receiving great deals, such as ‘interest free’ credit, or rewards points, but a failure to continually pay off your credit card debt can lead to financial distress and result in you paying interest rates as high as 40%.

Given the interest rates on credit cards can be so high, it makes sense that you’d want to pay them down as quickly as possible.

Below, we explore several strategies which you can use to pay down your credit card debt as quickly as possible.

Before diving into these strategies, we must first take into account three important considerations.

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Consideration 1: Future use

The most important decision to make revolves around how and if you’ll continue using your credit cards as you pay them off.

In a best-case scenario, you will completely stop using your cards, as this will immediately reduce spending.

Remember, the goal here is to completely limit your spending, so you can drop the balance of your cards through regular payments as quickly as possible.

The higher the balance, the more you’ll pay in interest.

If you’re in a situation where you simply can’t not use the cards, try and be diligent with your spending.

This will involve reducing unnecessary expenditure, such as gym direct debits and other non-essential items.

If you have little will power, give your cards to a trusted family member or friend, and have them take the card away from you – out of sight out of mind, right?

Consideration 2: Money to pay the debt

Consideration two is all about where to source your capital from, which will be used to pay the credit card debt off.

Will you use savings?

Or do you have the ability to source extra income?

Perhaps you’ll find a way to reduce your spending on non-essential items, or even sell some of your personal items you no longer need – de-cluttering your place and selling items on Facebook marketplace is an option used by many.

Irrespective of where the funds come from, any extra you can put towards chipping down your monthly credit card bill will serve you well in the long run.

Consideration 3: Why?

It’s imperative you understand your why!

Why are you marching down this path?

If you understand your ‘why’, the likelihood of paying off your cards and most importantly, keeping them paid off, increases dramatically.

Don’t focus on the negatives in this situation, as they’ll only cause you stress and anxiety, emotions that hinder the whole process.

Instead, focus on what you want and your ‘why’ – for example: I want to pay my cards off and become debt free, so I can take a holiday next year.

Remember, your ‘why’ is individual to you…it could be saving for a holiday, or a new car, or simply, you have a specific goal like being debt free before your 40.

After taking these factors into consideration, you can then move onto adopting a suitable strategy.

Below, we look at several proven and effective strategies which will help you traverse your way out of credit card debt.

Debt Relief Strategies

Divide and Conquer method

You might be asking yourself, what is the Divide and Conquer Method? Here’s what it looks like:

Step 1: List out all of the credit cards you have (lowest balance to highest is advisable).

Step 2: You’ll now make minimum payments on each of these products, except for the one with the lowest balance, for this will be your main focus point.


Let’s assume you have 5 credit products, each with different balances and different minimum repayments.

Credit Facilities Balance Minimum repayment
Credit Card 1 (A) $3,000 $100
Credit Card 2 (B) $5,000 $300
Credit Card 3 (C) $8,000 $500
Personal Loan 1 (D) $20,000 $1,000
Personal Loan 2 (E) $30,000 $2,000

The idea is to meet the minimum repayments on facilities B, C, D, E, whilst using extra money to pay down facility A as quickly as possible.

After you’ve successfully paid off facility A, you’ll then use the same methodology and apply it to facility B, and so on and so forth.

The process of dividing your credit cards and understanding the minimum repayments for each is very effective in helping you manage and reduce your debt, one step at a time.

This process also promotes self-diligence, as it provides you with a framework, which yields results.

David V Goliath method

You’ll no doubt be familiar with the famous story…A young boy (David) slays a Philistine Giant (Goliath) against all odds.

Of particular importance in this story is how he did it…you see, he knew he couldn’t match the giant in strength or stature, so instead, David opted for a more intellectual approach.

He hurled a stone from his sling, hitting Goliath in the head, a blow which would mark the giants end.

Much like the tale, you’ll use any excess cash you have to throw towards the debt with the highest interest rate, rather than the lowest balance, whilst ensuring you meet the minimum monthly repayments on your other debt.

Once again, it’s best to list out your debt obligations and organize them from highest interest rate, to lowest.

As you pay off each debt, move your way down the list and beat each giant, one step at a time.

Depending what stage you’re at in your debt management, it might feel like an impossible task, but if we’re to take anything from the famous story, it’s that anything is possible, especially when the right strategies are used.

Which strategy is best for me?

Each person’s situation is unique, so you must choose the strategy that makes the most sense to you.

Choose the strategy that is most effective for you, not just in dollar terms, but in feeling too.

It must feel right and if it does, you’ll likely have greater success in seeing it through and successfully paying off your debts.

For me, I much prefer the David v Goliath method, because I like to tackle my most serious problems first.

If it feels like this isn’t right for you, look at the Divide and Conquer method – don’t become paralysed by the choice, act now and push forward.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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