How to pay off a credit card faster

Paying the minimum on a card is designed to take a very long time. Seeing how long is usually enough to change behaviour.

Credit card minimum payments are typically a small percentage of the balance, which falls as the balance falls. The result is a payment that shrinks just fast enough to keep you in debt for a remarkably long time.

Step-by-step

1. Enter your balance and interest rate.
2. Enter what you pay each month.
3. Compare against paying a fixed amount, or a larger one.

Why the minimum takes so long

Because it is proportional. As the balance drops, so does the payment, so progress slows continuously. A balance at a typical card rate paid at the minimum can take well over a decade and cost more in interest than the original debt.

The single most effective change is to pay a fixed amount rather than the minimum — even the same amount you are paying now, held constant as the balance falls. The effect is dramatic and it costs nothing extra in the first month.

Order of attack with several cards

Highest rate first costs the least in total interest. Mathematically this is correct.

Smallest balance first clears individual cards sooner, which some people find easier to sustain. It costs slightly more and finishes more often, and finishing is what matters.

Either beats spreading extra payments evenly across everything.

Frequently asked questions

Why does paying the minimum take so long?

The minimum is a percentage of the balance, so it falls as the balance falls. Paying a fixed amount instead — even the same figure you pay today — shortens the term dramatically at no extra cost this month.

Highest rate or smallest balance first?

Highest rate costs less overall. Smallest balance clears cards sooner and is easier to keep up. The best plan is the one you will actually follow.

Does a balance transfer help?

Often, if the fee is smaller than the interest saved and you clear it within the promotional period. Check what the rate reverts to.