How to pay off multiple credit cards
Simplify your credit card debt
Having multiple credit cards means more debt and more
stress. Here's how to get rid of your debt and feel
the stress melt away.
Keep up your credit card
Pay off as much as you can every month to reduce interest. Make
sure you pay at least the minimum monthly repayment to avoid late
payment or default fees.
Your monthly statement gives you information about how long it
will take to pay off the entire balance by making minimum
Pay the highest interest
rate or smallest debt first
When choosing which credit card to get rid of first, you
- Pay off the credit card with the highest interest rate
first - In addition to making minimum payments on all
cards, pay more on the card with the highest interest rate, so you
pay off the total amount on that card first. Then work your way
through your other cards.
- Pay off the card with the smallest debt first
- Keep making minimum payments on all cards, and pay more on the
card with the smallest debt, so you pay off the total amount on
that card first. Then work on paying off the next smallest debt,
and so on.
Whatever option you choose, stop using all but one of your
credit cards, and try to only use it for emergencies.
Work out the fastest way to pay off your credit cards.
Credit card calculator
Case study: Emma's smart choice
Emma owes a total of
$10,000 on her three credit cards. The interest rates on the cards
average 20%. The minimum monthly repayments for the three cards
If Emma only makes the minimum repayments, it would take her 66
years to pay off her debt and she would pay over $44,000 in
Instead, she decides to pay $300 a month towards her debt. This
will pay off her debt in about 4 years, and save her almost $40,000
Close each credit card account
as you pay it off
As you clear the debt on each card, close the account by
contacting your provider. If you don't close the account properly,
you may still have to pay fees, even if you no longer use the
From 1 January 2019, all credit card providers must give you the
option of cancelling your credit card online.
Video: Effie Zahos on taking control of large credit card
Effie on managing large debts video
In this video, Effie Zahos talks about managing large credit
card debt, as well as options to help pay the debts off.
Lower your credit card
You may decide to keep one credit card for emergencies and
online payments. If so, lower the credit limit on it to an amount
that you can repay within 3 months, say $2,000. From 1 January
2019, you will be able to do this online.
Credit card balance
Another option is to move your debts across to a balance transfer credit
card with a lower interest rate for a set period.
To get the full benefit of a balance transfer credit card, make
sure you pay off the full balance transfer amount before the
balance transfer promotional period ends.
To avoid any nasty surprises, make sure you check what interest
rate will apply:
- After the balance transfer promotional period
ends - because you will pay this higher interest rate on
any balance you transfer across but do not pay off in time
- On new purchases - as any purchases you make
using your new card will usually attract a higher interest rate
than the special balance transfer promotional rate.
Get debt help if you need it
If you are having problems juggling your debts, it is important
to act quickly to get help. If you just ignore it, you may have
difficulty obtaining credit in the future if your credit report
If you need help with your debts:
- Contact your credit provider straight away -
You may be able to organise an agreed repayment plan until you pay
off your debt or until a temporary financial problem is
- Get help from a financial counsellor - Financial
counsellors offer a free service and can
help you sort out your debts.
Make a plan to reduce the number of credit cards
you have, and make sure your overall credit limit is one you can
Last updated: 24 Sep 2018