By Paul Feeney, Founder and Chief Executive Officer, Otivo
Credit cards are designed with a quiet trap built in, the minimum repayment. Pay only that, and a modest balance can take years and a small fortune in interest to clear, because the high interest rate compounds against you the whole time. The good news is that the escape is straightforward once you see the mechanics. Here's how to pay off a credit card faster.
Quick answer
To pay off a credit card faster, pay more than the minimum, since minimum repayments are structured to stretch the debt out and maximise interest. Focusing spare money on the highest-interest card first, while covering minimums on others, clears debt efficiently. As at July 2026, credit card interest rates are typically high, so reducing the balance quickly saves the most.
Why do minimum repayments keep you in debt?
Because the minimum is set low on purpose. A minimum repayment is often just enough to cover most of the interest and chip only a little off what you owe, so the balance barely moves while interest keeps accruing on it. On a high-rate card, paying only the minimum can stretch a modest debt across many years and multiply what you ultimately repay. The minimum keeps the account ticking over, which suits the lender far more than it suits you.
How does paying more than the minimum help?
Every dollar above the minimum goes straight at the principal, the actual debt. Reducing the balance means less interest is charged next month, so more of your following payment attacks the principal too. That reverses the trap and creates momentum in your favour. Even a modest fixed amount above the minimum, paid consistently, can dramatically cut both the time to clear the card and the total interest you pay.
What's the best order to pay off multiple cards?
There are two common approaches. The avalanche method targets the highest-interest debt first while paying minimums on the rest, which saves the most in interest. The snowball method targets the smallest balance first for a quick psychological win, then rolls that payment into the next. Mathematically the avalanche wins, but the best method is the one you'll actually stick with, so the motivation of the snowball suits some people better.
Should you consider a balance transfer?
It's one option worth understanding. A balance transfer moves your debt to a card offering a low or zero interest rate for a set period, which can pause the interest and let your repayments clear the principal faster. The cautions are real, there may be a transfer fee, the rate usually reverts to a high level after the introductory period, and new spending can undo the benefit. Used deliberately it can help, but it's a tool rather than a cure.
How do you stay out of credit card debt?
Clearing the card is one thing, staying clear is another. Keeping your spending within your income, building even a small emergency buffer so surprises don't land on the card, and treating the card as a payment tool rather than a source of extra money all help. The habits that keep you out of high-interest debt are ordinary, but they're what make the payoff stick rather than becoming a cycle.
Frequently asked questions
How can I pay off credit card debt quickly?
Pay more than the minimum every month, and direct spare money at the highest-interest card first while covering minimums on the others. Reducing the balance quickly cuts the interest compounding against you.
Should I pay off the smallest or highest-interest card first?
Paying the highest-interest card first saves the most in interest. Paying the smallest balance first can help motivation with an early win. The best choice is the method you'll stick with.
Will a balance transfer help me pay off my card?
It can, by pausing interest for an introductory period so repayments clear the principal faster. Watch for transfer fees, the higher reverting rate afterwards, and the temptation to add new spending.
Where to from here
Beating the minimum is the move that starts the exit. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a debt advice module that helps you find effective ways to pay down debt while covering essentials, based on your debts, income and expenses. It helps you build a plan that actually clears the balance.
Sources
- ASIC MoneySmart — credit card debt and balance transfers — moneysmart.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.