How Long Does Credit Card Debt Reduction Take?

Setting limits on the timing of your debt reduction strategy.

Get ready to erase your debt with credit card debt reduction

When it comes to high-interest credit card debt, repayment can take decades if you’re only making minimum payments – no kidding! If you have a $5,000 debt on a credit card at 18% APR and you only make minimum payments, it will take you 273 payments to pay off the debt completely on a standard minimum payment schedule. That’s almost 23 years of your life!

The information below can help you understand why debt repayment on a minimum payment schedule takes so long, as well as what you can do to build momentum so you can reach zero faster. If you’re struggling to get ahead of your debt payments and you need help finding a solution to eliminate your debt faster, we can help. Call Consolidated Credit today at or complete an online application to request a confidential debt and budget analysis from a certified credit counselor at no charge.

Why minimum payment debt reduction doesn’t work

Minimum payment schedules pay off a small percentage of your current balance, typically between one and five percent. For examples on our site like the one you see above, we set minimum payments at 2.5% of the balance, which is standard for most major credit issuers.

While minimum payment requirements give you the luxury of paying the debt you take on off over time, there are several issues that make a minimum payment schedule a less-than-ideal way to pay off debt:

  1. With typically high interest rates of 15% APR or more, the majority of each payment you make goes to paying off interest charges accrued on your balance instead of the principal debt.
    1. So on the initial example, your starting minimum payment requirement on that $5,000 debt would be $125.00
    2. However, interest charges eat up $75, so you really only paid off $50 of the debt
  2. After a certain point in a minimum payment schedule, you hit the $15 minimum threshold, which you pay over and over again, but barely make a dent in your debt
    1. So out of that 273 payments you made on your $5,000 debt, every payment made after payment no. 212 is $15
    2. Again, about $8 of that goes to interest charges, so you’re essentially maintaining a cycle of debt by making minimum payments

So on a minimum payment schedule you wind up paying off the debt for 22 years and 9 months and over that time you’d pay $6,923.13 in interest charges. That’s right – with minimum payments only, you actually pay more in interest charges than amount of debt you originally incurred. The total cost of your debt elimination would be $11,923.13.

This is why you want to pay more than the minimum requirements on your credit cards.

Credit card debt reduction with fixed payments

You can accelerate the timeline for credit card debt reduction by making larger payments on each of your credit cards one at a time. It’s more efficient to focus on one credit card debt at a time, making minimum payments on the others while you put all of your extra cash to reducing one individual debt. This usually works better than just putting a little extra cash towards every credit card debt at the same time – you save money and pay off your debts faster.

Ideally, fixed payments are the most efficient way to pay off a large credit card debt. You determine how much money you have available to pay and pay that amount every month. Even if you just set initial minimum payment requirement as a fixed payment it helps immensely.

  • Let’s say you set the first minimum payment of $125 on your $5,000 debt as a fixed payment instead of following the gradual decreases as you reduce your debt. Instead, you pay $125 every month until the debt is paid off.
    • Instead of 273 payments, you cut it down to 162 – that’s 13 and half years, so you’re out of debt significantly sooner
    • Additionally, you save significantly on interest charges – it only costs $4776.69
  • If you can increase that fixed payment amount to $300, then you can get out of debt in 20 payments – that’s only 1 year, 8 months; the total interest charges would also be reduced to $797.17

As you can see, the more you can increase the amount of money you put towards your credit card debt, the faster you can pay it off – which, in turn, also minimizes interest charges.

The five-year threshold in debt reduction plans

As you develop a plan to reduce your debt, you want to aim for a strategy that allows you to eliminate your credit card debt in full within five years. Experts agree, if a debt reduction strategy takes longer than five years to execute, you may be better off looking for alternative methods of repayment, such as debt consolidation and credit counseling. So if you can’t make payments large enough to pay off all your debt within five years, it’s time to start looking for alternative methods of debt relief.

In this case, your first stop should be to chat with a certified credit counselor for a free debt and budget analysis. They can look at your income and budget, while taking your debt and credit into account to help you find the best, most expedient way that you can get out of debt. It’s a good way to get an expert opinion on your situation so you can have peace of mind that you’re choosing the right solution that will work in the right amount of time.

How long does reduction take after consolidation?

In most cases when you’re looking for a debt relief strategy that will allow you to pay back everything you owe as quickly as possible, you’ll generally choose between one of three options for debt consolidation. This is where you roll your debts into one simplified payments that’s lower than what you’re paying on all of your debts in total.

The timing on reduction using a debt consolidation method really depends on your situation and which option you choose:

  • With a credit card balance transfer the timeline for elimination should be set based on the 0% APR introductory period. Ideally, you want to pay off your credit card debt in-full during the first months after you open the card and transfer your balances because you want to pay off your debts before the introductory period ends and the APR on the card increases. In general, introductory period last between 12 and 24 months. That means you have two years to pay off your debt before interest charges begin to be applied.
  • A personal debt consolidation loan will naturally give you a set timeline for elimination because the loan will have fixed payment spread out over a set number of payments. So, for example, you’d have a 36-month loan at 5% APR to pay off your $5,000. In this way, the timeline is based on how large of a monthly payment you can afford. Higher payments mean a shorter term. Again, always try to aim for a term on your debt consolidation loan that’s 60 payments or less.
  • A debt management program arranged through a credit counseling agency will also have a set amount of payments that will be mapped out before you being the program. When you have your initial consultation with your credit counselor, they will review your debt and budget to assess if a debt management program would be the best choice in your situation. If you’re eligible and it’s the right fit, they can tell you what your monthly payment will be and how long the program will take. In most cases, clients complete the program within 36 to 60 payments.