Paying off multiple credit cards fast
Take control and set your own fixed monthly repayments
Written by the Debt Freedom team 2 min read
Don't forget that interest on your card is added daily and calculated at the end of your month. So the minimum payments vary from month to month.
If you have multiple credit cards and you want and need to clear them all. The most effective method is to:
- Stop using them
- Set a fixed monthly payment for each of them.
- Overpay regularly on one card to clear it, then move on to the next card.
You can use the calculator to get an idea of the speed you can pay a card off compared to the card lender minimum.
Paying off a group of example credit cards
Let's say you have five cards, each with a balance on them. These revolving balances are going to be costing you a lot in interest and so paying them off is a really smart move.
Example credit cards
- £52.24 minimum increased to £60 fixed (Second target card to clear)
- £126,99 minimum increased to £130 fixed
- £92.88 minimum increased to £100 fixed
- £72.50 minimum increased to £80 fixed
- £29.11 minimum increased to £30 fixed (Smallest outstanding balance)
Total monthly fixed outgoing for this example: £400
Interest is added daily
Don't forget that interest on your card is added daily and calculated at the end of your month. So the minimum payments vary month to month. July is more interest as there are 31 days, whilst February with 28/29 is less.
Because Card 5 has the smallest balance, you should now focus on it. So any spare money you have you can pay it off. You don't have to wait until a bill is due - just send the extra immediately. The fixed payment will then have even more impact.
Once card five is cleared the example fixed outgoing goes down to £370. You may then have some additional spare cash to pay off your next target.
Just keep going till the job is done
Just keep going. Once they are all cleared and you're not paying multiple lender hundreds of pounds per month in interest. You can use your cashflow to help pay off other debts or more towards debt freedom emergency funds.