How to Pay Off Credit Card Debt When You Have No Money

Many people use credit cards to cover various purchases, but credit cards have high interest rates by design, and letting debt accumulate on your card can become very expensive. 

According to data from the Federal Reserve, collective household credit card balances totaled $1.18 trillion nationally in quarter one of 2025. Furthermore, the average credit card balance across U.S. households was $6,455 as of February 2025, according to data from TransUnion, one of the major credit reporting agencies.

It can be stressful to navigate credit card debt, especially if you don't have enough income to pay it off at the end of each month. However, by looking at your spending patterns and taking action, it's possible to get out of credit card debt over time, even if you're low on fund or feel like you have no money to work with. 

Even small payments add up and get you one step closer to being free from credit card debt.

8 low-cost ways to start paying off credit card debt

1. Stop using your credit cards

While credit cards offer unmatched convenience, they also make it easier to spend money you don't have. Taking a break from your credit card and using physical cash instead can help you stay within budget and minimize how much interest accumulates on your card.

Disabling one-click purchasing online can decrease the likelihood of impulsive purchases. Using a debit card instead of a credit card can also work, but that approach comes with its own risks, such as overdrawing your bank account and incurring fees for doing so.

But cutting your credit card use doesn't mean you need to close your card entirely. In fact, you definitely shouldn't — doing so can hurt your credit score in the short term by raising your credit utilization ratio. Furthermore, closing your credit card does not forgive the debt.

2. Reduce your spending overall

Spending less money gives you extra cash to put toward your credit card balance. While that's easier said than done, checking your previous one-to-two months of spending can offer some clues. For instance, canceling a few unused subscriptions can lead to instant savings. Many of the best money apps out there can help you do just that. You can also look for free alternatives, such as getting movies from the library instead of having multiple streaming subscriptions.

Buying used and old products can also keep your spending low. Instead of buying the latest iPhone, you can save a lot of money by purchasing the model from a few years ago.

These are some additional quick tips to reduce your spending.

• Eat at home
• Track your spending
• Look for coupons and special deals
• Carpooling
• Reduce energy use in your home (heat, electricity, etc.) within reason

The government has some programs that help qualifying individuals save money, such as food stamps and government-sponsored health insurance. It's good to check your options and see which programs can provide some financial support. These programs are administered at the state level, so you will have to reach out to programs in your area.

You can also request help from organizations to cover your bills, such as the following.

• 211.org
• LIHEAP and WAP for energy bills
• The Salvation Army
• Mercy Housing
• Modest Needs
• Volunteers of America
• Healthwell Foundation

3. Increase your income

Spending less money will give you more space in your budget, but there's a limit to how much money you can save with this approach. Simultaneously increasing your income will give you more options, and a higher income is the best path out of debt.

Selling unused belongings around the house can give you a quick boost, but working overtime and picking up a side hustle will generate more money in the long run. Developing skills that are relevant for high-income careers can give you better job prospects in the future. You can also put some of those skills to work as a freelancer.

It's important to avoid "lifestyle creep" as you make more money. A higher income isn't a license to spend more money. Instead, you can use the extra savings to pay off your credit card debt.

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4. Build an emergency fund

An emergency fund consists of extra reserves you can tap into for a financial emergency. It can come in handy in the event you lose your job and need some extra cash to make ends meet. A good emergency savings account can gradually free you from living paycheck to paycheck. We recommend opening a high-yield savings account for your emergency fund to optimize interest earnings on your balance.

Ideally, an emergency fund should cover at least three-six months of expenses. That can give you enough time to find another job in the event your company needs to lay off some of its workers.

It's important to prioritize credit card debt, but it's also good to keep some cash on the side. That way, you won't have to go deeper into debt to cover emergency expenses.

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5. Understand your overall debt

Getting out of any type of debt requires that you know how much you owe and how much you have to pay each month. You can list your credit card debt, mortgage, and any other type of debt to get a good snapshot of your finances. When listing out these obligations, make sure you list the remaining balance, minimum payment, interest rate, and due date.

Keeping this information in a spreadsheet helps with making changes as your balances change. You'll know how much you have to pay each month and which debt to prioritize with your leftover cash. It's a good idea to regularly update this list and stay on top of it until you are debt free.

6. Try the debt snowball method

The debt snowball method is a popular strategy for people who want to pay off debt while staying committed. It involves stringing together a series of small wins. This repayment method prioritizes debt with the smallest balances without regarding the interest rate.

If you have a $500 balance on one credit card and a $1,000 balance on another card, the debt snowball method involves paying off the $500 card balance first. You still have to make minimum payments for each financial obligation, but paying off the $500 balance gives you a small win which can generate momentum.

These are the pros and cons of the debt snowball method.

7. Try the debt avalanche method

The debt avalanche is another popular strategy for covering debt. This method prioritizes high-interest debt, regardless of the balance. While a $3,000 credit card balance is more daunting than a $500 credit card balance, the interest on a $3,000 credit card at 29.99% APR is worse than a $500 credit card with a 19.99% APR.

However, if the rates were reversed, a debt avalanche advocate would prioritize the $500 credit card balance at 29.99% APR.

These are the pros and cons of the debt avalanche method.

8. Consider moving your debt

It's not often a good idea to incur additional debt while you are trying to get out of debt. However, some strategies can work out in your favor, such as debt consolidation and balance transfer cards. These financial products can help you save money in the long run if you use them optimally.

Debt consolidation

Debt consolidation involves taking out a big loan to pay off your existing debt. You might get a lower APR with a debt consolidation loan than what your credit card provides. You can also opt for a lengthy loan term to make your monthly payments more manageable.

These are the pros and cons of using debt consolidation for credit card debt.

Balance transfer credit cards

Balance transfer credit cards allow you to move your entire balance from one credit card to another. This balance transfer typically results in a small fee, but interest will not accumulate on your new card during the intro period.

Some of the best balance transfer credit cards have intro 0% APR for the first 21 months.

These are the pros and cons to consider.

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Other ways to get rid of credit card debt

While the strategies mentioned above can help you cover ground with your credit card repayments, you have other options to consider. Debt management programs and debt settlements can help, and cardholders can also consider bankruptcy as a last resort.

Debt management program

A debt management program allows you to negotiate a payment plan for certain debt obligations. You can reach out to your credit card issuer to create a payment plan instead of having to default on a credit card or declare bankruptcy.

A credit counseling agency can negotiate on your behalf. They contact creditors and try to work out a new payment plan. Most agencies charge a low monthly fee for their services, but debt management fees cannot exceed $79/mo. Some states have lower limits in place.

Debt settlement

Debt settlement occurs when a cardholder and an issuer agree to a smaller debt amount that gets paid as a lump sum. For instance, a borrower who has $10,000 in credit card debt may agree to pay $7,000 right away to get rid of the debt obligation. Some issuers will agree to this arrangement, preferring to collect some of the amount owed to them instead of nothing at all.

However, debt settlement is a complex process. Not everyone has time to negotiate with creditors while working on side hustles and other tasks. You can work with an attorney or debt settlement firm to assist with the process, but it's good to conduct your due diligence before working with a third party.

Bankruptcy

Bankruptcy is the worst-case scenario as your credit score will take a significant hit that takes multiple years to recover from. However, this route could absolve you of your financial obligations and give you a fresh start.

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Bottom line

Getting out of credit card debt requires patience. It can take multiple years of gradual payments to finally reach the milestone. However, once you get there, you'll have greater financial flexibility and no money going to interest.

Every step you take to pay off your credit card debt gets you closer to becoming debt free. Tracking your expenses, looking for ways to make more income, and staying on top of your finances will help you reach your financial goals. Check out our list of the best budgeting apps for a range of tools that can help you manage your spending and get out ahead of debt.

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