6 Strategies for Paying Off Multiple Credit Cards

If you have several credit cards with outstanding balances ranging from hundreds to thousands of dollars per card, you may be trying to figure out the best way to pay down or pay off credit card debt.

Related: Signs You’re Serious About Raising Your Credit Score

Everyone’s financial situation is different, however, which means there can be several different approaches to paying off credit cards. Try some of these popular strategies for paying off multiple credit cards.

Some credit card holders may only be able to pay the minimum monthly payment on their balances. If you can only afford to pay the minimum, making that payment will at least be able to protect your credit score and keep your account from becoming delinquent versus making no payments or constantly missing payments.

However, it is strongly recommended to pay a little extra than the minimum payment if you have the wiggle room to do so. Paying a little more than the minimum amount, even an amount like $10, can help shrink your overall balance and accelerate the amount of time it takes for you to get out of debt.

The debt avalanche repayment method is a method commonly used for paying off student loan debt, but it works for credit card debt as well. You would pay off the credit card with the highest interest rate first and make minimum monthly payments on your other credit cards. After paying off the credit card with the highest interest rate, you’d move on to the next card with a high interest rate until you work your way through paying off all cards.

Using debt avalanche can help save on interest payments and speed up getting out of debt since you are minimizing interest. It can also help those with balances on multiple credit cards determine if there’s any “sore thumb debt” present. This is debt with an unusually high interest rate or unusually low balance. If they find they do have sore thumb debt, they may use a targeted payment to address outlier debt first.

The debt snowball is the reverse of the debt avalanche. Instead of starting with a credit card with the highest interest rate, you would pay off the credit card with the smallest balance. After paying off this card, while continuing to pay the minimum payments on other credit card balances, you would eventually “snowball” your way up to credit cards with bigger balances and pay these off. 

Debt snowball is generally cited as a popular way to repay debt because it allows you to experience little financial wins and boost your confidence. However, it’s important to note using the debt snowball method isn’t always recommended when paying off multiple credit cards because it encourages paying off cards with smaller balances versus focusing on high interest rates. Ultimately, it will depend on the credit card holder to determine which repayment method works best for their financial situation.

If you need more time to pay off your debt, look into transferring debt from high interest credit cards to a balance transfer card. This card should be one offering zero interest over a period of at least two years. 

Look into balance transfer cards available for you. Remember to read the fine print when considering how much debt can be transferred, whether you can or can’t complete a transfer between cards issued from the same bank and what your credit score needs to look like for a balance transfer.

There are a few benefits that work in your favor if you decide to stop using your credit cards. The first is you will not be able to continue accruing a larger balance if you are no longer charging specific items to these cards. Cardholders may also consider cutting the cord on monthly subscriptions, like streaming services, which can continue hiking up your balance. 

Those not using their credit cards on a daily basis may also be able to contact their credit card company to see if they can negotiate a lower interest rate. This will better enable you to be able to pay off your balance faster.

Cardholders struggling to pay off their credit card debt or simply can’t get out of debt may decide to enlist professional help. 

Working with a credit counseling agency, like those available through the National Foundation for Credit Counseling, gives individuals the opportunity to work with a reliable expert. These credit counselors can help you develop an actionable plan to defeat your debt and consolidate your bills into one manageable monthly payment.

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