3 Reasons You Can’t Eliminate Credit Card Debt

This is why your monthly payments never seem to make a dent.

Paying off credit card debt should feel like a race to the finish, but often it feels more like you’re stuck running on a treadmill. You make payments month after month, but you never seem to get anywhere. So, why can’t you eliminate credit card debt quickly?

 #1: Minimum payments don’t work to get you out of debt

Credit card companies are not evil, but they’re there to make a profit. They extend a line of credit for you to use and interest charges are the cost of that convenience. That’s how your creditors make revenue, so they’re fine if you stay in debt forever.

Minimum payment schedules are not designed to be efficient methods of debt repayment. You only pay a small percentage of your balance – usually around 2 percent. It takes a long time to eliminate debt a few percentage points at a time. If you make new charges each month, it can seem like you never get anywhere.

If you're frustrated that you can't eliminate credit card debt on your own, ask for help

#2: High APR eats up over half of every payment

Interest charges are a big part of the reason you can’t eliminate debt efficiently. If you make minimum payments at 15% APR, roughly one half of each payment covers accrued monthly interest charges. At 20% APR, it jumps to two thirds of each payment.

#3: Even with more money, debt elimination can be slow

Minimum payments don’t work, so you try paying more. Either you throw a few extra dollars on top of the required payment or you make fixed payments. Have you calculated how long repayment will take?

  1. Use the calculator below to check the repayment time on just one of your balances
  2. Enter your current balance and interest rate; if you don’t know your payment schedule, choose 2 percent.
  3. The calculator will automatically tell you your minimum payment
  4. Choose an amount of money to add to that each month, plus a fixed payment


Even if you cut your budget down to just necessities, it can take a long time to reduce your debt. If you’re not making the progress you want, it’s time to find a better way to eliminate your balances.

Finding the Best Way to Eliminate Credit Card Debt

There are three basic ways to pay off credit card debt faster without causing credit damage or risking your assets. You can:

  • Use a balance transfer credit card, paying off the debt fast with large interest-free payments
  • Consolidate the debt, using a low interest rate personal loan to pay off your balances
  • Enroll in a debt management program with the assistance of a credit counseling agency

The right choice depends on your debt, credit and budget.

Option 1: Balance Transfer Credit Card

This option is best used if you have good free cash flow in your budget and a good credit score. You open a new balance transfer credit card at 0% APR. Then you transfer the balances from your existing cards, with a fee that’s between $3 and 3% of the transfer.

You have a certain number of months to pay off your debt interest-free. The length of time depends on your credit score and the account you open; introductory periods range from 6 to 24 months.

Option 2: Personal Debt Consolidation Loan

Here you take out a personal loan for debt consolidation. You qualify based on your credit score and choose a term that offers monthly payments that work for your budget. In general, you want a term of five years or less and the rate should be no more than 10%.

The money goes to pay off your balances, leaving only the loan to repay at a lower interest rate. This method may help reduce your monthly payments, depending on the term you choose. A longer term costs more with total interest charges, but lowers your monthly payments; a shorter term means lower total costs, but higher monthly costs.

Option 3: Debt Management Program

If you have too much debt to pay off on your own or a low credit score you may need help eliminating debt. This is where a credit counseling agency like Consolidated Credit comes in to work on your behalf. They help you work out a repayment plan that works for your budget and negotiates lower rates with your creditors.

Your can qualify for a debt management program regardless of your credit score. You make one payment to the agency and they distribute the money to your creditors. It’s like an assisted form of debt consolidation without a loan.

Here are a few examples of the result you can see with a debt management program:

Magalys from Woodland Park, NJ

The best thing I could have done was to make that first call and I’m glad I did. I’m almost debt free. Thank you!

Where she started:

  • Total unsecured debt: $24,454.00
  • Estimated interest charges: $13,786.94
  • Time to payoff: 13 years, 6 months
  • Total monthly payments: $978.16

After DMP enrollment:

  • Average negotiated interest rate: 2.70%
  • Total interest charges: $2,149.04
  • Time to payoff: 3 years, 1 month
  • Total monthly payment: $710.00
Time Saved:
10 years, 5 months
Monthly Savings:
$268.61
Interest Saved:
$11,637.90
Liz from Puyallup, WA

When I stumbled across Consolidated Credit it’s seemed too easy to be true but we decided to give it a try. Now 2½ years later I couldn’t be happier. We could never have paid this off on our own.

Where she started:

  • Total unsecured debt: $55,638.00
  • Estimated interest charges: $32,117.78
  • Time to payoff: 16 years, 1 months
  • Total monthly payments: $2,225.52

After DMP enrollment:

  • Average negotiated interest rate: 6.27%
  • Total interest charges: $4,208.58
  • Time to payoff: 4 years, 4 months
  • Total monthly payment: $1,137.00
Time Saved:
11 years, 9 months
Monthly Savings:
$1,088.52
Interest Saved:
$27,909.20