How Fast Can You Get Out of Debt?

If your credit card balance seems stuck, you need a strategy and a payoff date.

— -- intro: You’ve decided enough is enough and you are going to get out of credit card debt. And you probably want to do it as fast as you can. So how long will it take?

Don’t have a clue?

That’s not surprising, considering you probably have several cards all with different interest rates and monthly payments.

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Your second step is to just plug that information into a credit card payoff calculator which can show you how fast you can pay off your debt. Don’t worry about creating a detailed spreadsheet, or agonize about whether you are going to use the “snowball” or “avalanche” method to pay off your debt. That can come later. Right now you just want to get an idea of what it will take. And a simple debt payoff calculator can help you do that.

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How to Speed It Up

That payoff data may seem forever away, but there are ways for you to speed up the process.

quicklist: title: Lower your interest rates. text: When you have a lower interest rate, more of your money goes toward principal (the actual debt you owe) each month. You may be able to lower your interest rate by negotiating with your card issuers.

quicklist: title: Do a balance transfer. text: If you can qualify for a low-rate balance transfer, you can move your debt from one card to another and save a lot of money. Start by asking your current card issuer whether they have offers available. If not, you may want to shop for a low-rate balance transfer card.

quicklist: title: Get a consolidation loan. text: A low-rate personal loan can be an excellent option for credit card debt consolidation. If you qualify for one of these loans, you’ll usually have a fixed interest rate, and a set monthly payment which makes it easier to budget. Best of all, it’s easy to find out what your debt-free date for this loan will be.

quicklist: title: Pay more each month. text: Whether you decide to take on a side job or gig, or get serious about cutting back your spending (or both). putting extra money toward your debt can help you get out of debt faster — and often a lot faster than you realize. For example, take someone who has two credit cards with balances. One has a $3,000 balance at 15 percent, and the other is a $2,500 balance at 17.9 percent.

At a minimum monthly payment of $131 it will take just over five years to be debt-free and cost a little over $8,000 (with 33 percent of that being interest). But pay less than $100 more a month — $222 a month total — and you can be debt-free in two years and seven months, and the total cost will be $6,753 with only 19 percent of that interest.