NerdWallet Home Page

How To Pay Off Your Credit Card: 5 Tips

Jun 7, 2023Following a schedule, using automated withdrawals and paying more than the minimum can go a long way.
Profile photo of Georgia Rose
Written by Georgia Rose
Lead International Writer
Profile photo of Barry Choi
Written by Barry Choi
Freelance Writer
Profile photo of Georgia Rose
Written by Georgia Rose
Lead International Writer
+ 2 more
How To Pay Off Your Credit Card: 5 Tips
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

Forty-three percent of Canadians currently have credit card debt, according to NerdWallet’s 2023 Consumer Credit Card Report.

Nearly half (48%) say it will take them less than six months to pay off all their credit card debt, but 40% say it will take six months or longer to clear their credit card balance, according to the report.

Paying off your credit card balance should be a straightforward process, but it’s not always so simple. High interest rates can accumulate quickly and send you into a debt spiral.

Whether you’re in deep credit card debt or just don’t like carrying a balance, here are five tips to paying off your card.

Ways to pay off credit card debt

1. Automate your payments

Most credit card providers allow you to automate your payments. You can usually choose to pay the minimum amount, make a full payment or pay a fixed amount of your choosing.

Since the money is automatically withdrawn from your bank account, there’s no chance that you’ll miss a payment, which can be costly. Issuers typically charge late fees when a bill isn’t paid and can increase the interest rate moving forward. Plus, skipping a payment can damage your credit score.

2. Make more than the minimum payment

The minimum payment on a credit card is the smallest amount you can pay to avoid fees and keep your account in good standing. While just making the minimum payment may sound appealing, it’ll keep you in debt longer.

For example, if you have a $5,000 credit card balance and you only pay the minimum payment, it’ll take nearly 21 years to pay off the balance. However, if you pay just $50 more than the minimum amount, it’ll take just over five years to clear the debt*.

Among Canadians with a credit card, just 58% say they always pay credit card balances in full each month, according to NerdWallet’s report. While you may not be able to clear the entire balance, it’s always advisable to pay off as much of it as you can every month.

*Calculations based on 20% APR and 3% minimum payment (or $10, whichever is higher) using the Government of Canada’s Credit Card Payment Calculator .

Payment details
You'll be debt free in 12 months
$1,000Current princial balance
$0.00Estimated interest cost
90.42%
9.58%
Monthly payment$100

APR (%)20.50%

Number of payments0

Total amount paid$1,000.00
Results are estimates only. Your actual interest payment and length of debt may vary.

3. Switch to a low-interest credit card

If you often carry a balance, you may want to consider switching to a low-interest credit card. As the name implies, low-interest credit cards charge a lower-than-typical interest rate, such as 12%. Paying less interest can have a significant positive impact on your budget.

In addition, many low-interest and balance transfer credit cards allow you to port your balance from an existing card. Quite often, this option comes with a promotional rate that can save you even more money. For example, you might pay 0% interest for 12 months on a balance transfer, allowing you to pay down the balance faster. Once that promotional period ends, you’ll pay the regular low interest rate. It’s worth noting that balance transfers are not free, they typically come with a one-time transfer fee.

4. See if you qualify for a line of credit

Applying for a line of credit can help you consolidate your debt since they tend to have lower interest rates than credit cards — 7%, for example. If you’re approved, you can take the funds and immediately pay off all credit card balances, leaving you with one monthly payment on the line of credit.

The danger here is that a line of credit is still another loan. If you miss payments or let the interest accumulate, you’ll end up in more debt. That said, if you use a line of credit responsibly, you can take advantage of the low interest and quickly pay down what you owe.

5. Prioritize your debt

Paying off credit card debt may not be the most enjoyable pastime, but it’s worth prioritizing. This may mean pulling back on entertainment purchases or unnecessary expenses while you pay it down. Even switching out your daily coffee order for a homemade brew can save you over $50 a month. That money can not only go toward paying your bill, but won’t be added to the debt on your next statement.

Nerdy tip: Review your statements

Among Canadians who currently have a credit card, 89% say they check their balance at least once monthly, although 5% say they check less than once a month, according to NerdWallet’s 2023 Consumer Credit Card Report.

Reading your credit card statement each month may not sound like fun, but it’s in your best interest to take a detailed look.

Go through each transaction line-by-line to ensure all the purchases are correct. Then, see if you can find unnecessary trends. For example, if you keep seeing food delivery charges on your statement, add them up. You may be surprised by how much you’re actually spending. Once you know where your money is going, you can create a realistic budget based on what you actually buy.

Use a spreadsheet or money management app to keep track of your spending and cut down on the manual math.

NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.

  1. Government of Canada. Credit Card Payment Calculator. Accessed Dec 20, 2023.