Minimum payments are designed to keep you paying for a very long time. On a high-rate card, a large share of each minimum goes to interest. The first step is to stop guessing: write down every balance with its rate and minimum payment, then run the calculator below.

Credit card payoff

See the cost of the payment you make now. Works in any currency.

Assumes no new purchases and interest compounding monthly.

Choose a payoff order

With the avalanche method, you pay the minimum on everything and put every extra dollar on the highest rate. It costs the least. With the snowball method, you clear the smallest balance first. It costs a little more but gives quick wins that keep many people going. The method you will stick with is the correct one.

Consolidation loan versus staying on the card

Compare total borrowing costs at the same payment. Works in any currency.

Uses the loan’s payment on both sides, so that the two figures compare directly.

Balance transfer cards

These offer a low or 0% introductory rate for a set period, usually with a fee commonly around 3% to 5% of the transferred amount. It works if you qualify, stop using the old card and clear the balance before the promotion ends. Otherwise the remainder goes to the standard rate. A late payment can also end the deal.

Consolidation loans

A personal loan replaces several card balances with one fixed payment and an end date. It helps if the rate, including any origination fee, beats your cards. Beware of the trap: clearing your cards with a loan and then charging them up again, which leaves you with both debts. Be very careful about using a home equity loan for card debt, since unsecured debt becomes debt secured by your house.

Credit counseling and debt relief

Nonprofit credit counselors can set up a debt management plan with reduced rates. For-profit debt settlement is very different. It often asks you to stop paying creditors, which damages your credit and can trigger lawsuits, and forgiven debt may be taxable. In the US, the FTC’s rules bar companies that telemarket these services from charging fees before they settle a debt. Upfront fee requests are a red flag.

What this does to your credit score

FICO scores give about 35% weight to payment history and 30% to amounts owed, so on-time payments and lower balances can help over time. Avoid closing your oldest cards without checking the effect on your utilization.