Why card debt is so hard to shift
At typical card APRs, minimum payments barely dent the balance — most goes on interest. The best way to clear card debt is to stop or slash the interest while you repay, or restructure the debt into a cheaper form. The right route depends on the balance, your credit and whether you're keeping up with payments.
1. 0% balance transfer card
Move your balance to a card charging 0% interest for 18–30 months, so every payment reduces the actual debt. Best for those with reasonable credit who can clear (or largely clear) the balance within the 0% window. Watch the transfer fee and the post-deal rate.
2. Personal consolidation loan
A fixed-rate loan that pays off your cards, leaving one predictable monthly payment over a set term. Best for larger balances or if you want the discipline of a fixed end date. Often cheaper than card interest if your credit is decent.
3. The avalanche method (lowest cost)
Pay minimums on everything, then throw all spare money at the highest-interest card first. Mathematically the cheapest way to clear multiple cards. Best for those who want to minimise total interest and can stay disciplined.
4. The snowball method (most motivating)
Pay minimums, then clear the smallest balance first for quick wins and momentum. Slightly more expensive than avalanche but psychologically powerful. Best for those who need motivation to keep going.
5. Free debt help (if you're struggling)
If you can't keep up with minimums, a Debt Management Plan via a charity can freeze interest and reduce payments. Best for those in difficulty — and it's free via StepChange or Citizens Advice.
Which is best for you?
- Good credit, can clear in ~2 years: 0% balance transfer
- Larger balance, want a fixed plan: consolidation loan
- Multiple cards, want lowest cost: avalanche method
- Need motivation: snowball method
- Can't meet minimums: free debt advice
How to find the best route
If a consolidation loan suits you, a whole-of-market broker can find the lowest-cost option for your credit profile. Find a debt specialist through Nesto — free, no obligation.
Frequently asked questions
Is a balance transfer or a loan better for card debt?
A 0% transfer is cheapest if you can clear it within the deal; a loan gives a fixed end date and suits larger balances. Compare the total cost.
What's the difference between avalanche and snowball?
Avalanche targets the highest-interest debt first (cheapest overall); snowball targets the smallest balance first (most motivating). Both work — pick what you'll stick to.
Will clearing card debt improve my credit score?
Yes — reducing your credit utilisation and paying reliably generally lifts your score over time.
Should I close cards once I clear them?
Not always — keeping a cleared card open can help your utilisation ratio and credit history. Just avoid running the balance back up.
What if I can't keep up with payments?
Get free debt advice immediately. A DMP can freeze interest and lower payments, and charities won't charge you for help.