If you have credit card debt, you're not alone: Americans owe a record $1.08 trillion on their cards, according to credit reporting agency Experian, with the average balance pushing past $6,300.
Carrying a large balance increases your debt burden, hurts your credit score and negates any benefits you're getting from your card's rewards plan. And with credit card interest rates at historic highs, it can be harder than ever to get out from under.
Below, CNBC Select reviews the best ways to chip away at your credit card bills, whether you've got one card or a walletful.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
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Freedom Debt Relief has resolved over $20 billion in outstanding debts since 2002. It offers free credit card debt relief consultations.
Using a balance transfer credit card
You can avoid crushing interest rates by transferring debt from high-interest cards to a balance transfer credit card that has zero interest for up to two years.
The Citi Simplicity® Card may not earn rewards, but it can still save you money due to its amazing intro-APR offers.
- One of the longest intro APR offers for balance transfers
- No annual fee
- No rewards
- No welcome bonus
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
There are some limitations to this strategy: Balance transfer cards typically set caps on the amount you can transfer and you can't transfer a balance between cards issued by the same bank. In addition, you'll need a FICO credit score of at least 670, which is considered good or excellent.
Make sure to read the fine print before you apply for a transfer.
Consolidating debt with a personal loan
If you don't want to add another credit card, a personal loan provides you with cash over a fixed period and usually with a fixed interest rate that's lower than a credit card APR.
Depending on your credit score, you may qualify for a loan that covers your entire credit card debt. And if your debt is spread out across several cards, consolidating it into a personal loan will be easier to manage.
CNBC Select ranked Happy Money as one of the best options for a personal loan. If you don't have a great credit history, applicants only need a fair credit score — 580 or above — to qualify for a loan.
Peer-to-peer lending platform makes it easy to check multiple offers
- Peer-to-peer lending platform makes it easy to check multiple offers
- Loan approval comes with Happy Money membership and customer support
- No early payoff fees
- Fast and easy application
- U.S.-based customer service
- Higher loan minimums ($5,000)
- Must submit soft inquiry to see origination fees and other details
LightStream is another attractive option if you're trying to pay off high-interest credit cards thanks to its low APRs. You will need a FICO credit score of at least 670, but LightStream doesn't charge late or origination fees.
LightStream Personal Loans offer low APRs, no fees and the ability to apply online. Its terms are as long as 20 years, or 240 months.
- Same-day funding available through ACH or wire transfer (conditions apply)
- Loan amounts up to $100,000
- No origination fees, no early payoff fees, no late fees
- LightStream plants a tree for every loan
- Requires several years of credit history
- No option to pay your creditors directly
- Not available for student loans or business loans
- No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)
Borrowing money from family or friends
If your credit score is below 580, you may have a hard time qualifying for a balance transfer card or personal loan.
If you're thinking of asking a family member or friend for a loan, make sure you set up a repayment plan before borrowing any money. And stick to it like you would a bank loan so you don't risk damaging your relationship.
Paying off high-interest debt first
If you have debt across multiple cards, it's a good idea to use the avalanche method — where you pay off the balance on the card with the highest interest rate first, then work your way through the rest from highest to lowest APR.
You can also combine techniques by opening a balance transfer card with a 0% introductory APR. Polish off any lingering balances on your high-interest cards first and pay the minimum on your balance transfer card.
After the high-interest card is paid off, tackle your balance transfer card more aggressively.
Similarly, if you've consolidated debt with a personal loan or by borrowing from family or friends, prioritize paying off high-interest balances first.
Paying off the smallest balance first
Then, there's the snowball method of debt repayment, which involves paying off the card with the smallest balance first and working your way up.
The theory is that zeroing out a card balance provides a sense of accomplishment and encourages continued debt management. Financial advisors usually don't recommend the snowball method because it can result in more interest charges compared to paying off high-interest cards first.
At the end of the day, the most important thing is to create a debt repayment plan you can stick to. If paying off a card with a smaller balance in full will keep you on track in the long run, it may be the right choice for you.
If you decide to employ the snowball method, you should still make minimum payments on your other cards.
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Bottom line
Credit cards are a necessity in today's world — and they can be an asset if you budget well and pay off your balance each month. If you find yourself buried under credit card debt, however, there are options that give you more time to pay it off with less interest.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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