If you’ve spent a lot on your credit cards in recent months and you’re worried about how you’ll pay it off, fear not, there are plenty of ways to tackle it and get on top of your finances in no time.
Get the ball rolling
One of the quickest ways to pay off what you owe is to reduce the amount of interest you’re paying.
If you have a number of different credit cards to clear, start by finding out which of your credit cards has the highest interest rate, as this is the credit card that’s costing you the most in interest payments.
You should be able to find your interest rate on your monthly bank statements but if you can’t your bank will be able to tell you in branch or by telephone (if you’re set up with telephone banking).
Once you’ve worked out which card is charging you the most interest, pay as much as you can towards this credit card each month, while also keeping up with the minimum monthly repayments on your other credit cards.
When you’ve cleared the credit card with the highest interest rate, start paying more towards the card with the next highest interest rate and so on. This process can be an effective way to organise and prioritise which card to clear first.
Just remember to keep making at least your minimum payments on your remaining cards so that you don’t end up facing late payment charges and jeopardising your credit score.
Up your minimum payments
The more you can repay each month, the quicker you’ll be able to pay off what you owe (and avoid further interest accruing on your balance).
Minimum monthly repayments are often set at low levels, so if you can afford to pay more than this each month you’ll pay off your credit card quicker and save interest.
Our handy credit card calculator provides an easy way of working out how quickly you can pay off your outstanding balance by adjusting the amount you repay every month.
Avoid racking up unnecessary fees
Setting up a monthly direct debit will ensure you don’t miss a payment on your credit card. If you miss payments, you will be charged a late payment fee.
Similarly, avoid taking cash out on your credit card as when you make cash withdrawals you will normally pay a fee, plus interest will be charged from the date of the withdrawal.
Explore your credit card options
Using a 0% balance transfer card can be a cost effective way to pay off your outstanding credit card balance as you will reduce the amount of interest you’re paying.
You can do this by transferring your balance to a new card with a 0% balance transfer deal. That way you’ll be able to avoid paying interest for a set amount of time – up to two years or more in the very best cases – which should help you to make a dent in what you owe.
Representative Example: If you spend £1,200 at a purchase interest rate of 19.9% p.a. (variable) your representative rate will be 19.9% APR (variable).
Be aware you’ll usually have to pay a fee (typically around 2%-3% of the overall balance) to make your transfer, but this can still be worth paying when you take into account the amount you will save overall. If you get a 0% balance transfer card, it’s best to avoid using it for purchases and stick to using it for its purpose – clearing your balance.
It’s also worth noting that you will need a good credit score to get the most competitive balance transfer credit card deals.
Access balance transfer cards with Credit Monitor
MoneySuperMarket's Credit Monitor app gives you a free credit score and can help you find balance transfer cards you're likely to be accepted for – taking away any uncertainty that that your application won’t be approved.
Credit Monitor also shows you the interest rate you’re likely to be offered by lenders, allowing you to accurately estimate the cost of borrowing, if for example there is a balance transfer fee.
No fee balance transfer cards
If you can afford to clear your balance in less time, some balance transfer cards offer shorter 0% periods but no transfer fee, so you could save even more money.
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