Financial Resource Center


How Can I Pay Off Credit Card Debt?

by Consumer Education editors / March 19th, 2021

If you’re up to your eyeballs in credit card debt, it probably seems sometimes like you’ll never pay off those bills.

No one is saying it’ll be easy, but with some focused strategy, and help from your credit union providing this calculator, you’ll be able to pay off those credit cards--probably sooner than you think.

The key is having a plan of how and when you’ll pay off debt.

By paying just an extra $25 to $50 a month toward one of your credit card bills, you’ll be able to pay off that card, then move to the next one.

You’re probably wondering, “How can I come up with extra money?” Curbing spending is the place to start. Here are some ways to identify spending leaks so you can redirect small savings to credit card debt:

  • Adjust your tax withholdings and put the extra money toward debt each month. The average tax refund is around $2,900--don’t lend money to Uncle Sam.
  • Pack your own lunch. Fast food at $6 a day adds up to around $1,500 a year. Brown bagging is a good place to start.
  • Pay bills online. You’ll avoid late fees (late payments also can raise your interest rate) and save on postage as well.
  • Review phone, cable, and internet service bills. Are you paying for features you don’t use?
  • Adjust your thermostat at night or when you’re not home.
  • Travel during off-peak/off-season times or put that big vacation on hold. Travel in-state or make day trips instead.
  • Save on gas by combining errands instead of making several little trips the same day.
  • Replace  high-interest bank credit cards for a low-rate credit card from your credit union.
  • Pay more than the minimum on your credit card.

Consider the example of a $2,000 balance at 18% interest. If your minimum payment is 2% of the balance due each month, it will take you about 19 years to pay it off and you’ll pay $3,862 in interest. (A 2% minimum payment would start at $40 and taper to $20. Maintain the $40 and you’ll pay off the debt faster. That's what our calculator assumes.)

If you’re paying 4% of the balance due, you’ll pay off the balance in seven years and four months and cut your interest costs to $1,031. (A 4% minimum payment starts at $80 and tapers to $20.)

By paying 8% of the balance due, much more than the minimum, it will take you 3 years and 9 months to pay off, and you’ll pay about $433 in interest. (An 8% minimum payment starts at $160 and tapers to $20.) Remember, these calculations assume you add no more charges to the card.

At the very least, always pay the minimum amount due so you don’t incur a late fee.

This calculator assumes you are going to pay no less than your "starting" minimum payment. It also assumes that you will pay off the credit card with the highest interest rate first and that you’ll add no more debt. That means, no matter what--unless for a real emergency--you won’t use those cards. Print your results to save for future reference and to track your progress.

Provision of this calculator is not an offer of credit. Its use in no way guarantees that credit will be granted. This calculator is solely for informational purposes and provides reasonably accurate estimates; the calculations are not intended to be relied upon as actual loan computations.

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