3 Ways to Pay Off Credit Card Debt Quickly in 2023

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Shedding your debt in short order could work to your benefit. 

If you closed out 2022 with a pile of credit card debt, rest assured that you’re not alone. Unfortunately, many people have had to rack up debt this year due to inflation. And even during periods when costs aren’t inflated, it’s common to wrap up the holiday season with some amount of debt, so if that’s the boat you’ve landed in, it’s not so unusual.

At the same time, starting off a new year with credit card debt is hardly ideal. Not only can it be demoralizing, but also, the longer you carry that debt, the more it’s going to cost you in interest. And if you allow your debt to linger for too long, you might reach the point where the interest you pay exceeds the initial charges you made.

If you’re eager to shed your debt as quickly as possible in 2023, the right strategy could be your ticket to meeting that goal. And you can use these tactics to eliminate your debt well before the end of 2023.

1. Tackle your costliest balances first

You might owe money on a few different credit cards. Chances are, each one has a different interest rate attached to it. Your best bet for shedding that debt quickly is to pay down your balances in order of most expensive to least expensive interest rate. So if, for example, you have a card with a 19% interest rate and another with a 14% interest rate, you’ll want to tackle the balance with a 19% interest rate first — even if it’s larger than your other balance.

2. Consolidate your debt with a balance transfer

If you have decent credit, you might qualify for a balance transfer offer. That allows you to move your various credit card balances onto a new card with a lower interest rate attached to it. In fact, you’ll commonly find that you’re able to snag a 0% introductory APR on a balance transfer, thereby giving you a break from racking up interest as you pay your debt off.

While a balance transfer can be a great way to pay down debt quickly, you should know that these offers tend to come with fees, often as a percentage of the balance you’re moving to the card. You’ll need to crunch the numbers to make sure a balance transfer makes sense. And also, you’ll want to do your best not to add to your balance as you’re paying it off.

3. Consolidate your debt with a personal or home equity loan

If a balance transfer isn’t a good option for you, you can instead try consolidating your credit card debt with a home equity or personal loan. The former option obviously only applies if you own a home whose equity you can borrow against. But in either situation, the benefit of taking out a loan to pay off your credit card debt is that you’ll generally snag a much lower interest rate in the process.

Plus, both personal and home equity loans offer the benefit of fixed interest rates. That means your monthly payments won’t change due to rising interest rates, so they may be easier to work into your budget.

Starting a new year with credit card debt isn’t wonderful, but it also doesn’t have to be a terrible thing. And if you employ these strategies, you may find that you’re debt free well before the end of 2023.

Top credit card wipes out interest until 2024

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More