At a Glance

If you’ve accumulated a lot of debt, you might be looking for creative ways to pay off debt quickly. And while getting out of debt is a process that can take months or years depending on how much you owe, there are some debt payoff methods that are better than others. Here are 6 of the best ways to pay off debt.

1. Immediately Stop Excess Spending

Before you start on a debt payoff journey, you first need to stop the problem at the source. That means stop adding unnecessary expenses to your credit cards. To make it happen, you may need to implement minor habit changes, such as:

  • Removing your credit card numbers from being stored on your web browser
  • Implementing a 24-hour rule on all online purchases
  • Not carrying credit cards to a store when you’re just browsing

Each of these strategies can help you limit expenses throughout the month and decrease your overall debt burden over time, ultimately helping you get out of debt quickly.

One of the best ways to get out of debt is to stop creating more debt first.

2. Switch to Cash

When credit card spending seems too easy, sometimes switching to cash is the best option to cut back. Simply handing over cash to make a purchase pulls a psychological trigger that makes you think twice about it. If you can, try to make only required payments online and opt for cash for day-to-day purchases like groceries and dining out.

Related: Credit Card Payments

3. Pay Off the Highest Interest Debt First

The debt avalanche method is one of the most effective ways to pay off debt. You’ll start by making a list of all outstanding debts, including the interest rate. Then, you’ll pay as much as you can toward the debt with the highest interest rate while maintaining minimum payments on all other debts.

Once the high-interest debt is paid in full, you’ll shift the focus to the next highest interest debt and so on until all debts are repaid. This debt payoff method is designed to save you the most money over time, although it may take you longer to get the first debt paid down.

4. Quickly Pay Off the Smallest Debt First

The debt snowball strategy is designed to increase motivation by getting you a quick win. With the snowball, you’ll make a list of all debts, including the amount due. You’ll then aggressively pay down the smallest debt while making minimum payments on all other debts.

Once the smallest debt is paid in full, you’ll hone in on the next highest debt and continue with this approach until all debts are repaid. The snowball debt payoff method has become incredibly popular because getting the smallest debt out of the way fast often gives people the boost of confidence and motivation to continue, even when paying off debt feels hard.

The debt snowball is one of the best ways to pay off debts with small balances.

5. Pay Extra When You Can

When it comes to credit card debt, you can make as many payments as you want throughout the month. If you have extra cash coming in from part-time jobs, side hustles, or unexpected gifts, consider immediately making a debt payment instead of waiting until you make your larger monthly payment. Doing so means you’ll be able to pay off debt more quickly and avoid paying interest on a higher balance.

6. Consider Using a Balance Transfer Credit Card

Perhaps one of the best ways to pay off credit cards is by leveraging the benefits of a balance transfer card. Those with higher credit scores will qualify for more favorable balance transfer terms. In addition, if you can qualify for an introductory offer, like 0% APR for the first year, you can end up saving a bunch of money by consolidating your credit card balances to the new card.

Then, you can aggressively pay off that one card interest-free until the introductory period expires. Of course, it goes without saying that this approach is most beneficial if you can pay down a hefty chunk of your credit card debt before the interest rate returns to normal.

Transferring your debt to a 0%-interest credit card can save you a lot of money.

The Bottom Line

Being deep in debt can drag you down financially and emotionally. But there are ways to pay off debt, like using the debt snowball or avalanche method, paying more than the monthly amount due, and using balance transfer credit cards to consolidate debt. Getting out of debt certainly won’t happen overnight, but putting a plan in place means you’re in the driver’s seat and no longer at the mercy of your debt.


What are the Traps to Avoid During Debt Pay Off?

When you’re working to aggressively pay off debt, avoid traps like:

  • Taking on new debt, even if the offer seems too good to be true
  • Using emergency savings for debt repayment
  • Buying things you don’t need to make other people happy
  • Thinking being in debt is permanent

Is Debt Snowball Better Than Debt Avalanche?

The debt snowball method, which starts by paying off the smallest loan first, is designed to give you a burst of motivation with a quick win. The debt avalanche, which starts with the highest interest debt, will help you save the most money over time. Depending on what motivates you, a quick win with the debt snowball may be better than the debt avalanche.

Read More: Snowball vs. Avalanche Repayment Methods

To save money on interest, choose debt avalanche otherwise debt snowball.