Credit Card Debt: DIY Solutions & Professional Help

There’s more than one way to get out of credit card debt. The best approach depends on how much you owe, your credit score, and how long you've been a good customer. This comprehensive guide covers everything you need to know to get rid of credit card debt.

What’s the best way to pay off credit card debt?

Several options can help you get rid of credit card debt (more on that below)—some you may want to avoid. Each has its own strengths and weaknesses and will involve some sort of a trade-off. Getting out of debt quickly and with minimal out-of-pocket costs will mean more damage to your credit score. Some in-between methods require a good credit score, while others require you to be at financial rock bottom.

Figuring out which approach to use boils down to these main factors:

• The amount of debt you have
• Your timeline (how quickly you want to get out of debt)
• How much damage to your credit you’re willing to take

Learn the different ways to pay off Credit Card Debt »

5 types of credit card debt relief options

Debt relief refers to any solution that allows you to pay off debt more efficiently when traditional monthly payments aren’t working. From DIY credit card debt solutions to hiring professionals to negotiate with credit card issuers on your behalf, you have options that vary in involvement, how much you pay back, and the impact on your credit score.

Here’s how the five options compare at a glance:

1. Do-it-yourself approach

You can try several ways to get out of debt without professional assistance. Most involve taking out new financing, such as a debt consolidation loan or a balance-transfer credit card. Other options include negotiating with credit card issuers individually to work out a repayment solution such as a workout agreement (like a DIY debt management plan), deferment, forbearance, or even settlement.

To use any non-financing DIY methods, you’ll need to know how to negotiate with credit card issuers.

2. Balance Transfer

A balance transfer credit card lets you move balances from existing accounts to a new card that offers low or no APR on balance transfers. These cards often offer a 0% APR introductory rate when you first open the account, typically for 6-18 months. The extended interest-free period to pay off the transferred balance typically comes with a fee. Balance transfers are typically 3-5% of the total balance or a small base amount like $5 or $10.

This option works best if you have excellent credit and can pay off the entire balance before the promotional 0% APR ends. If you don't pay the balance in that timeframe, you'll be right back where you started with a high-interest-rate credit card and a large amount of debt. This means you’ll need a reliable cash flow. If you're short on cash (or it's tied up paying debts elsewhere), this probably isn't the best option for you.

If you still have a good credit score, two ways to get relief from credit card debt involve new financing. You take on new debt to pay off your existing debts more efficiently. The key goal is to reduce or eliminate the APR applied to your total credit card balance.

3. Debt Consolidation

A debt consolidation loan is a personal loan you take out to consolidate debt. This leaves you with only one loan to repay, which can help because loans typically have much lower interest rates than credit cards. The better your credit score, the better your loan repayment terms. Additionally, fixed payments offer stability, whereas most credit card APRs are variable and can fluctuate.

Debt consolidation is recommended for those who owe $35,000 or less. Some lenders may have restrictions, such as requiring you to close your credit cards to secure the loan so be prepared to lose those lines of credit. Your credit score may take a significant hit, but it can save you a lot of money in the long run.

4. Credit counseling / Debt management plan

If you’ve exhausted all the do-it-yourself options and you are still having trouble paying off your debt, you may need to call in professionals. Professional help is often the fastest, easiest, and most cost-effective way to eliminate credit card debt.

One of those options is not-for-profit credit counseling agencies which are government-regulated and operate solely to aid consumers. They can enroll you in a unique credit card debt solution known as a debt management program or (DMP). This program is a form of assisted debt consolidation but doesn’t require taking out a new loan.

Here’s how it works:

1. A consumer credit counseling agency helps you set up a repayment plan that fits your budget.
2. Then they negotiate with your creditors to reduce or eliminate interest charges and stop penalty fees.
3. Once your creditors agree to receive payments through the program, your program starts.
4. You make one monthly payment to the credit counseling agency.
5. Then they distribute the money to your creditors as agreed.

Unlike other types of consolidation, with a debt management program, you pay back everything you owe (because of this, many credit users who complete the program actually see improvements to their credit scores). The benefits of this strategy include credit counselors working with credit card issuers and lenders to reduce or eliminate interest charges and fees. You can get out of debt faster with lower monthly payments and reduced damage to your credit score. You still owe your original creditors, but you pay them back in a more efficient, cost-effective way.

5. Debt settlement program

Debt settlement programs get you out of debt for only a percentage of what’s owed. It’s usually the quickest and cheapest option to eliminate debt and the closest to a credit card debt forgiveness program. It can significantly damage your credit score, but so can other debt relief options.

Of the available get-out-of-debt resources, a legitimate debt settlement program is one of the most helpful. Debt.com surveyed more than 1,000 Americans on how they felt about debt settlement and bankruptcy. More respondents found the former "helpful" and the latter "risky."

This chart shows how they felt about each:

Here’s how professional debt settlement works:

1. First, you and the debt settlement company will determine how much you can contribute toward the lump-sum settlement amount. That money will be set aside in a separate escrow account.
2. Once you have enough funds, the settlement company contacts your creditors to negotiate settlements.
3. They get each creditor to agree to accept a percentage of what you owe in exchange for discharging the remaining balance.
4. Once your creditors agree to the settlement amount, they take the funds from your set-aside account.
5. From there, the creditor closes the account, discharges the remaining balance, and reports the settlement to the credit bureaus.

Working with a professional debt settlement company can greatly improve your odds of success (these companies likely already have relationships with your creditors), but you still need a lump sum to settle the debt.

By law, settlement companies can charge fees only after they successfully reach a settlement in your favor. Most companies will charge you a percentage of the amount they save you.

Bad ideas for credit card debt relief

Not all credit card debt relief solutions are created equal! These bad ideas for debt relief put your finances on shaky ground and could make for a bumpy financial ride long-term.

1. Cashing out retirement savings and investments

You don't just drain the funds you take out; you also lose the yield you would have earned, putting you two steps back on your retirement savings.

In addition, retirement funds like a 401(k) and traditional IRA have early withdrawal penalties. If you take money out before you turn 59 ½, you'll face a 10% charge on the funds. You must also pay taxes on the money withdrawn, since it counts as income.

Is Using Your 401k or IRA to Pay Off Credit Card Debt a Bad Idea? »

2. Borrowing against your home

Credit card debt is unsecured, meaning there's no collateral that secures the debt. Any option that taps home equity for cash, such as a home equity loan or cash-out refinance, is considered secured debt. If you borrow against your home equity to pay off credit card debt, you effectively convert unsecured debt to secured. If you default on the new debt, you could lose your home.

In general, you want to protect your home's equity as much as possible. Borrowing against it is extremely risky, and it's usually not worth that added risk to pay off your credit cards. Even if you default on a credit card and it goes to collections, they can't take your home. In fact, they must sue you in civil court to force any kind of repayment. But once you take out an equity loan, your home is at risk of foreclosure if you fall behind on the payments.

Is Refinancing My Home to Pay Off Debts a Good Idea? »

3. Borrowing against a life insurance policy

If you have a life insurance policy with cash value, you can usually borrow against it. But just because you can doesn't mean that you should. If you take money out, you effectively take out a loan against your insurance policy. You make a new debt with a whole new set of problems.

If you don't pay it back or die before it's paid off, the insurer will take out the amount owed plus interest. In other words, your family will have less life insurance to help them live after you're gone. That money is there to provide your family with a financial safety net in case the worst happens. You don't want to do anything that will weaken that safety net.

Should I Cash Out My Whole Life Insurance Policy to Pay Off Debt? »

4. Borrow money from family and friends

Unless you don't mind losing a friend or making family gatherings extremely awkward, it's best to avoid borrowing money from people you know. Approximately one-third of Americans already know this and reported that they would prefer to go into debt rather than borrow from loved ones.

A recent LendingTree survey on lending between friends and family found that nearly half of Americans have lent money to a friend or loved one, and over 1 in 4 regret doing so. One in three (35%) of combined borrowers and lenders report that money hurt their relationship:

• 14% say it caused hurt feelings
• 11% say it led to decreased contact
• 10% say it led to resentment

Borrowing money from someone you know rather than an institution can be much cheaper than a formal loan, but it carries the risk of straining relationships.

How to avoid credit card debt

Trying to avoid credit card debt in the future? No need to cut up your credit cards and swear off plastic for good. Credit cards can be extremely useful financial tools as long as you know how to use them. Keep these four key things in mind when using credit cards to your advantage.

1. Get the right type of credit card

It can be daunting to figure out which type of credit card best suits your needs. We break down the types of credit cards so you can better understand what you may be getting yourself into.

2. Open the right card at the right time

Don't rush into a decision. Take your time and examine all your options before you pick a card. Whether you need a card to help rebuild your credit, one with a promotional 0% APR, or one that earns rewards, make sure it fits your specific needs. From there, you'll narrow down your choices and decide between no more than two or three similar cards.

The credit card you choose should help you achieve your financial goals. So, don't settle for less, but don't shoot for the stars either. Find a balance that works for your lifestyle.

3. Negotiate lower interest rates

Negotiating lower interest rates is an art form in and of itself. It takes skill, knowledge, and a lot of patience. But the end game is worth the effort since your reward comes in the form of lower interest rates and lower monthly payments. You may even be able to reduce the time it takes you to pay off your debt.

4. Always pay the statement balance in full

The surest way to avoid credit card debt is to pay the statement balance (not the minimum balance) so the regular purchase APR applies. If your financial situation allows, set up credit card auto payments and choose to pay the statement balance automatically. The next best option is to set up automatic minimum payments and then make an additional payment within 30 days of your due date to pay off the remaining monthly balance. If you have a zero-percent APR offer active, all you technically need to pay is the minimum monthly payment. However, you should plan on paying off the entire balance by the end of that promotional period.

How credit card debt will affect your…

You may feel like you have your credit card debt under control, but it could be costing you in more ways than you think, slowly but surely chipping away at your financial health.

Credit score

Credit card debt can directly contribute to a lower credit score because it affects what’s known as credit utilization rate. Also called your debt-to-credit ratio, your credit utilization rate is a percentage that shows how much of your available credit you're using. It makes up 30% of your FICO score and ranks second only to payment history (which is obviously a huge deal to potential lenders).

The general rule of thumb is to keep your total credit usage below 30%, but the lower it is, the better. A high credit utilization rate signals greater reliance on credit, which lenders may see as a sign you don’t have enough cash to pay your expenses and could have difficulty repaying what you owe.

Your credit card balance can indirectly make it more difficult to get approved for loans or other lines of credit and to get the best interest rates. Higher interest rates can mean more fees, more debt, and more negative remarks on your credit. It’s a vicious cycle.

Debt-to-income ratio (DTI)

Credit card debt can also raise your debt-to-income ratio, which prospective homeowners will want to watch closely. This percentage reflects how much of your income goes toward paying your debt and is especially important to mortgage lenders. They prefer low DTIs, which indicate you have enough disposable income to cover your debts even if an unexpected expense arises (like going to the emergency room or taking your car to the mechanic).

Say you make $5,000 a month but have $3,000 in total monthly minimum payments. Your DTI would be 60%, showing that more than half of your monthly income goes toward bills. The higher your credit card balance, the higher your minimum credit card payment will be, which raises your DTI.

Personal relationships

Unpaid IOUs to credit card issuers can affect your family both directly and indirectly. Spouses, children, or parents can find themselves saddled with lawsuits and bills.

Have you ever thought about what happens to credit card debt when you die? In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), spouses may be held liable for the deceased's credit card debt.

Children usually aren’t held directly responsible for a deceased parent’s debt unless they’re joint account owners. However, creditors can, and often do, go after the deceased’s estate, which can detract from their inheritance. Bad apples may also pressure the child to pay off the debt even if they’re not legally liable.

What happens if you don’t pay your credit card bill?

Failing to pay your credit card bill is never a good idea. It can result in a slew of unpleasant side effects ranging from mildly inconvenient to majorly damaging your credit score.

If you’re having trouble making your payments or think that you might in the near future, contact your creditors as soon as possible (ideally before you miss your first payment). Being proactive and communicating with your creditors is much more effective than missing due dates and later trying to undo the damage and charges. You may be able to arrange deferment or forbearance to pause or reduce your payments while you get back on your feet. This can help you avoid credit damage and account closures.

Delinquency

The immediate consequence of not paying a credit card bill is that your account will be reported as delinquent, which is just a fancy term for being past due or overdue. At this stage, the initial penalties are applied, such as a late fee or a penalty APR. Both can make your remaining unpaid balance even more expensive to carry.

Credit card issuers typically report delinquent accounts to credit bureaus after 30 days, although some will wait 60 days if this is your first time missing a payment. Once this negative remark hits your credit report, you can expect your credit score to take a hit. Delinquency remains on credit histories for seven years. However, you can avoid this if you pay the past-due balance before the 30-day mark when it's reported to credit bureaus.

Learn more about credit card delinquency »

Charge-offs

If your account stays delinquent and several months of missed payments go by, the next stage is a credit card charge-off. A charge-off is when a credit card company or lender closes an account because of nonpayment. Essentially, they write your account off as a loss because they no longer expect to receive any payments. This happens to accounts that have been delinquent for more than 180 days.

This may sound like you’re off the hook, but you still owe the full amount even once the account is written off and deemed uncollectible. Failure to pay could lead to legal action. However, in most cases, you won’t owe money to the original lender anymore. They may hire a collection agency or sell your debt to one.

A charged-off account can seriously damage your credit, and it can be hard to undo. A charge-off will add another ding to your credit report on top of months of delinquency. And like delinquency, a charge-off will stay on your report for up to seven years, even if it’s eventually paid off. With that in mind, debt negotiation is often your best bet. You can ask for debt forgiveness. However, creditors will rarely agree to forgive your balance outright with no payment in exchange.

Account levy

One of the most severe repercussions of not paying a credit card bill is an account levy. This is when a creditor seeks repayment by taking the funds directly from your accounts, usually a personal checking account. Credit card issuers must take you to court. If the court rules in their favor, then they can tap your accounts to withdraw your money directly. In addition to taking funds from an account, they can also garnish your wages (taking funds from a paycheck), force the sale of your property (including a home or car), or even tap to remove cash from your business’ cash register.

However, if you owe money on a credit card issued by a financial institution like a bank or credit union, they can bypass court and instead take money directly from the checking or savings accounts you have with them. The exception is that you must have previously authorized that account to make automatic credit card payments.

Protections for consumers with credit card debt

Fortunately, legislation protects consumers dealing with credit card debt. Keep these in mind when deciding which debt-relief strategy is best for you. They’ll also help you determine whether any debt collection methods you’re facing are legal.

Statute of limitations on credit card debt

The statute of limitations on debt is a protective measure for consumers that limits the time window in which a creditor (including debt collection agencies) can file a lawsuit against you to collect what you owe. Once the allowed timeframe has passed, typically 3-6 years, those debtors can no longer take you to court over the unpaid debt, which becomes “time-barred”.

This statute applies to all types of debt such as mortgage debt, auto loan debt, medical debt, and private student loan debt in addition to credit card debt. The exact time frame can vary by state, as can the circumstances of when that countdown timer begins. Be mindful that making a payment (even a partial one) toward the overdue debt, or even acknowledging that you owe it, can cause the timeframe to restart. Contact your state attorney general’s office to discover the specifics for your state.

Uniform Debt-Management Services Act

The Uniform Debt-Management Services Act is a federal law passed in 2005 that governs the credit counseling and debt management service industry. As a result of the act, credit counseling agencies must register as a consumer debt management service in each state where they operate. They must also provide full disclosures about their debt management plan and a penalty-free three-day cancellation policy.

Government credit card debt relief programs

A common misconception is that federal credit card debt relief programs exist that consumers can use to get out of debt. For the record, there are no grants or any federally sponsored repayment plans to pay off your credit card debts. That said, the federal government oversees and regulates the debt relief industry, which may be where some confusion about government debt relief programs comes from.

Average credit card debt statistics

According to the Federal Reserve Bank of New York's Q2 2026 Household Debt and Credit Report, Americans collectively have $1.26 trillion in credit card debt, up from $1.25 trillion the prior quarter. Credit card balances have climbed in each of the last several quarterly reports, continuing a longer-running trend Debt.com has tracked in prior coverage of rising consumer debt.

Debt.com polled more than 1,000 Americans in its annual "Credit Card Survey." More than 1 in 4 respondents say they have between $10,000 and $30,000 in credit card debt. Nearly 3 in 10 say they owe $5,000 to $10,000.

Credit card debt may not be the most critical source of debt for most Americans, but when paired with rising mortgage debt, student loans, and unexpected healthcare costs, any credit card balance can be enough to pull your finances too thin for comfort.

See more credit card debt statistics »

How do people end up with credit card debt?

Although overspending is an obvious cause of credit card debt, it isn’t the only one. At the core of the issue, people simply don’t understand how credit cards work or how much their debt is actually costing them. According to the TIAA Institute-GFLEC Personal Finance Index, only 48% of Americans have what’s considered fundamental financial literacy.

In Debt.com's latest Credit Card Survey, more than half (57%) said they got their first credit card when they were between the ages of 18 and 24. When asked who introduced them to their first credit card, the most common answer was "their parents" – with 1 in 3 (32%) of respondents choosing that answer. One of the most interesting takeaways from the survey was the main reason why people use credit cards.

More than 1 in 4 (25%) say they use credit cards for convenience.

Because credit cards are accepted everywhere and let you pay off bills over time rather than all at once, it's easy to fall into debt. One of the best ways to prevent credit card debt is to understand the basics of how credit cards work – especially the features that often become pitfalls for consumers.

Want to learn how to use your credit card like a pro? Check out our ultimate guide to credit card hacks »

Credit card interest (APR)

Credit card interest, or annual percentage rate (APR), is the amount you’re charged for carrying a credit card balance and how lenders make a profit. The average credit card interest rate is around 24%, even for someone with Excellent credit. By contrast, the average rate for a personal loan is around 12% for the same credit score.

Debt.com's Credit Card Survey found nearly half (48%) of respondents with $10,000 to $30,000 in credit card debt say the average APR on their cards is 15-20%.

Because of the extremely high interest rates, credit card debt is often the most expensive type of debt. Carrying a balance even once can negate any rewards or other credit card perks. Additionally, high APRs mean more of your future payments go toward interest rather than your principal, which can make it extremely challenging to pay off if the debt gets out of hand.

Minimum payment

Credit card minimum payments aren't designed to help you pay off debt faster. In fact, they are designed to make banks or credit card companies profit. Though they may make payments more affordable and keep you from being penalized, you're flushing a lot of money down the drain in the long run and putting yourself deeper in debt.

When you make only minimum payments on your debts, it can take years, if not decades, to pay off even one account, with potentially thousands in added interest charges. Always pay as much as possible, ideally paying off the balance in full every month.

Credit card fees

All credit cards come with fees or some sort. Annual fees, late payment fees, balance transfer fees, foreign transaction fees, and cash advance fees. If you’re not careful with how you use your credit card, you may inadvertently find yourself charged with unexpected costs. The best way to determine what types of transactions you’d be charged for (and how much) is to check the Schumer box for the credit card you’re interested in.

Annual fee: The yearly charge of owning a credit card that is added to the customer’s statement balance. It may be waived for the first year during sign-up. If you no longer want to pay an annual fee, ask your card issuer whether they can waive it again or downgrade you to a version of the card without the fee.

Late payment fee: A flat fee charged for failing to make the minimum payment by the due date. This charge is applied immediately following the missed payment. However, many card issuers will waive the fee the first time you miss or are behind on a payment. It’s not automatic, so you’ll have to reach out to them. Their answer may also depend on your relationship, so if you’re a long-time customer, you may have more bargaining power than a brand-new customer.

Balance transfer fee: A fee charged per balance transfer. It's either a percentage of the total amount or a flat fee, typically $5 or $10 (whichever is greater). This charge is rolled into the total balance and can be paid off over time. Some balance transfer cards may offer a promotional interest rate of low or no interest for a set period.

Foreign transaction fee: An additional surcharge per transaction for purchases made outside of the United States. These range between 1% and 3%. Many credit cards don’t charge a foreign transaction fee even outside the types designated for travel.

Cash advance fee: One of the worst ways to use a credit card is for cash advances. Not only do they come with outrageously high fees (even by credit card standards), but those fees are charged immediately. Normal purchases have a grace period before you're charged interest (as long as you pay the full statement balance by the due date), but cash advances have no grace period.

Increased credit limits

A credit limit determines the maximum amount you can charge to your credit card. A variety of factors determine it, including your income, credit score, and payment history. A larger credit limit means greater borrowing power, but just because you can spend more on a credit card doesn’t mean you should.

For one, a general rule of thumb to keep your credit score healthy is to keep your credit utilization rate below 30%. But beyond FICO scores, maxing out a credit card is simply a bad habit to get into. People who habitually use up all their available credit often run into trouble when credit card issuers raise your credit limit—something many issuers do periodically and unprompted.

A higher credit limit can be a source of constant temptation for someone who hasn’t developed healthy credit usage habits. The safest way to use a credit card responsibly is to only spend what you can pay off by the statement balance due date regardless of how much credit you might have available to you.

Credit card debt FAQ

Below are a few of the most popular questions about credit card debt we’ve received. If you still have questions about credit card debt. Our comprehensive Credit Card Debt FAQ can answer any – and all – remaining questions. If not, you can always call us at . You’ll be connected with a friendly debt expert that provides the answers you need.