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  • To pay off debt fast, you need to exceed your minimum payments every month. 
  • Target the debt with the highest interest rate, also known as the “avalanche method.”
  • Lower your interest rate by requesting a lower APR from your card provider or consolidate debt.

Carrying debt for too long — even if you’re leveraging it to grow your wealth — can quickly begin to feel like a burden. 

You’re not alone in your debt. Most of us don’t have immediate access to cash to pay for everything we want, so we borrow money in the form of credit cards, loans, or mortgages. The average American carries $52,940 in total debt.

While this is a problem that many people share with you, it is still a problem nevertheless. The more debt you have and the longer you hold it, the more expensive it becomes with interest constantly eating at you. If you’re holding too much debt on your credit cards specifically, more than 30% of your overall limit, you can also hurt your credit score, making future borrowing more costly. 

With these consequences laid out, it’s clear that the faster you pay off your debt, the better. Here’s how you can become debt-free fast.

How to pay off debt fast

1. List all of your debt

If you have multiple sources of debt — say several credit cards, student loans, and a personal loan — the first step to paying off debt is determining how much debt you have to pay off. This means keeping identifying all outstanding balances, their interest rates, any minimum payments, and payment due dates. Google Sheets — or a simple pen and paper — can be an invaluable tool for keeping track.

This can be an intimidating exercise for people with a lot of debt, but there’s no way to make a clear plan for tackling it without a hard look at the numbers.

2. Stop using credit cards

Taking on more debt while you’re trying to repay a load of other debt can complicate things. While you’re in repayment mode, avoid taking out another loan or using credit cards, unless you can absolutely afford to pay off the balance at the end of the month. 

Cutting off credit card spending can be a challenge. It may be worth your time to look into budgeting plans that divide your take-home income into sections like the 70-20-10 budget or the 50-30-20 budget. Ideally, once your budget is laid out, you’ll see how much money you can devote toward paying off debts.

3. Make your minimum payments

At the bare minimum, you should be setting aside enough money each month to make your monthly payments. Missing any of these, particularly missing your payments by over 30 days, will put you in credit delinquency, which can hurt your credit score and stay on your credit report for up to seven years.

4. Set a payment strategy

Once you’ve got an idea of all your outstanding balances and made all your minimum payments, you can strategically distribute extra funds money across all your debts. One such strategy is the avalanche method, which focuses on paying off debts as fast as possible. Once you’ve made all your minimum payments, the avalanche payment method concentrates any extra funds toward the debt with the highest interest rate. Focusing on paying off the most expensive debts first can speed up the entire repayment process as you save money on interest. 

There are debt management apps like Tally that optimize your payments with a specific goal in mind, like paying off your debts as fast as possible. 

5. Ask your credit card issuer for a lower interest rate 

Most people don’t know you can call your credit card issuer to ask for a reduced APR (annual percentage rate), which can make a difference of hundreds of dollars in interest payments. There’s no guarantee that they’ll give you a reduced rate, but you’ll be more likely to get it if you make you’ve consistently made on-time payments. 

6. Consider consolidation

If you have debt on multiple credit cards, you may consider consolidating your balances into one so you can make a single monthly payment. There are two main ways you can do this: 

Balance transfer credit card: A balance transfer card allows borrowers to consolidate various credit card balances onto a new credit card, ideally one with a lower APR. You’ll have to pay a transfer fee that’s usually 3% to 5% of the total balance transferred, but it’ll be worth it in the long run. Balance transfer cards also typically come with a 0% introductory APR that can last up to 21 months. If you’re able to pay off your debt within that promotional period, you have the potential to save a lot of money on interest.

Debt consolidation loan: If you have other debts in addition to your credit card debt, you can look into debt consolidation loans. These work similarly to balance transfer cards, rolling all your debts into one big loan at a lower interest rate, which will depend on your credit score. Unfortunately, debt consolidation loans often have higher interest rates than other loan types, ranging from 6% to 36%.

7. Establish a payoff date

Paying off debt is a good goal to have, but paying off debt by a specific date is even better.

Carious online calculators can tell you exactly how many months you have until you’re free and clear, according to your current interest rate and monthly payments. If 18 months sounds like too much, increase your monthly payment by $50 or $100 to start and see what difference it makes.