How to Get Out of Credit Card Debt Faster: Your Step-by-Step Guide
Learn how to use balance transfers, personal loans, and proven payoff strategies like the Snowball and Avalanche methods.
Credit card debt can feel like a heavy weight. The high interest rates mean that even when you make your minimum payments, the balance barely seems to budge, leaving you feeling trapped on a financial treadmill. But it is possible to break the cycle. Getting out of credit card debt is one of the most powerful steps you can take towards achieving financial freedom.
At Plouta, our mission is to provide you with clear, practical knowledge to help you take control of your money. This guide will walk you through a step-by-step plan to tackle your credit card debt, from immediate actions to long-term strategies, helping you save a fortune in interest and pay off your balance faster.
What You Will Learn in This Guide ⤵
The Two Golden Rules: The essential first steps you must take.
Strategy 1: The Balance Transfer: How to stop paying interest and focus on the debt.
Strategy 2: The Consolidation Loan: Using a personal loan to simplify your repayments.
Strategy 3: The Payoff Method: Choosing between the Debt Snowball and Debt Avalanche.
Where to Get Free Help: Knowing when to reach out to expert charities.
Step 1: The Two Golden Rules of Getting Out of Debt
Before you look at any specific products or strategies, you must commit to two fundamental rules.
Golden Rule #1: Stop Borrowing You cannot get out of a hole while you're still digging. The very first step is to stop adding to your debt. This means putting your credit cards away and committing to living on the money you have. This might require a temporary change in lifestyle, but it's a non-negotiable step.
Golden Rule #2: Create a Budget You need to know exactly where your money is going to find the extra cash to throw at your debt.
Track Your Spending: Use a budgeting app or a simple spreadsheet to track your income and expenses for a month.
Identify Cuts: Look for "wants" that you can temporarily cut back on – streaming services, takeaways, daily coffees. Every pound you save is a pound you can use to pay off your debt faster.
The 50/30/20 Rule: As a guide, aim to spend 50% of your take-home pay on "Needs" (essentials), 30% on "Wants" (lifestyle), and a minimum of 20% on "Savings & Debt Repayment."
Step 2: Choose Your Weapon – Strategies for Tackling the Debt
Once you've stopped borrowing and found some extra cash in your budget, you can choose a strategy to drastically reduce the amount of interest you're paying.
Strategy 1: The Balance Transfer Credit Card
This is often the most powerful tool for clearing credit card debt.
How it works: A balance transfer card is a new credit card that offers a 0% interest period on balances you transfer over from your existing, high-interest cards. This promotional period can last for 12, 24, or even up to 30 months.
The Benefit: During the 0% period, every penny of your repayment goes towards clearing the actual debt, not just servicing the interest. This allows you to make rapid progress.
The Catch:
You will usually pay a one-off balance transfer fee (typically 1-3% of the amount you transfer). A 3% fee on a £5,000 transfer is £150. This is almost always worth it compared to the interest you'd pay otherwise.
You will need a good credit score to be accepted for the best deals.
Crucially, you must aim to clear the entire debt before the 0% period ends, as the interest rate will jump to a high standard rate afterwards.
Strategy 2: The Debt Consolidation Loan
This involves taking out a single, low-interest personal loan to pay off all your existing credit card balances.
How it works: You replace multiple, high-interest credit card debts with a single loan that has a fixed interest rate and a structured repayment plan over a set term (e.g., 3-5 years).
The Benefit:
Simplicity: You only have one monthly payment to manage.
Certainty: You have a clear end date for when you will be debt-free.
Lower Interest: The interest rate on a personal loan is almost always significantly lower than a standard credit card APR.
The Catch:
You will need a good credit score to get the best loan rates.
It requires discipline. Once you've cleared your credit cards with the loan, you must not start spending on them again, or you will end up in a much worse position.
Step 3: Choose Your Payoff Method – Snowball vs. Avalanche
Whether you use a balance transfer, a loan, or are tackling the debt on your existing cards, you need a clear strategy for paying it off.
The Debt Snowball: You list your debts from smallest balance to largest and attack the smallest one first, while making minimum payments on the others. Once the smallest is cleared, you "roll" that payment onto the next smallest. This method is great for psychological wins and building momentum.
The Debt Avalanche: You list your debts from highest interest rate (APR) to lowest and attack the most expensive one first. This method is the most mathematically efficient and will save you the most money in interest.
Plouta Tip: The best method is the one you will stick with. If you need quick wins to stay motivated, choose the Snowball. If you're driven by saving the most money, choose the Avalanche.
Where to Get Free, Professional Help
If you feel your debts are unmanageable and you are struggling to make even the minimum payments, it is crucial to seek help. Do not turn to fee-charging debt management companies. Instead, contact one of these free, confidential, and expert debt charities:
They can provide expert advice and help you find the right solution for your circumstances.
Know Where You Stand: Take the Plouta Financial Wellness Survey
Taking our Financial Wellness Survey is a great first step. It will help you reflect on your habits and identify the key areas to focus on in your journey towards financial freedom.
Key Takeaways
The Golden Rules: The first step to getting out of debt is to stop borrowing and create a budget.
Stop Paying Interest: Use a 0% balance transfer credit card to pause the interest charges and make rapid progress on clearing your actual debt.
Consolidate for Simplicity: A low-rate personal loan can simplify your repayments and give you a clear end date.
Choose a Payoff Method: Use either the Debt Snowball (for motivation) or Debt Avalanche (to save the most money) to focus your efforts.
Seek Free Help if You're Struggling: Expert debt charities like StepChange can provide free, life-changing support.
Conclusion: Your Path to a Debt-Free Life
Getting out of credit card debt is a journey that requires commitment and a clear plan. By taking control of your spending, choosing the right strategy to minimise interest, and focusing your efforts, you can break the cycle. Every pound of debt you clear is a step towards reducing stress, increasing your financial options, and building a future of security and freedom.
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Disclaimer: This guide provides general information about getting out of credit card debt and is for informational purposes only. It does not constitute financial advice. The suitability of any product or strategy depends on your individual circumstances and credit status. If you are struggling with debt, it is essential to seek free, impartial advice from a regulated debt charity.