How to Pay Off Debt: Top Strategies for 2026

You have three credit cards with the following balances and annual percentage rates:

You put whatever money you can toward the $1,500 card, which is the smallest balance, and pay only the minimums on the other two. Once the first card is paid off, you roll its payment into paying off the $4,000 card, and eventually, the $6,500 card.

» MORE:Learn more about the debt snowball method

Debt avalanche

With the debt avalanche strategy, you pay off the debt with the highest interest rate first (while paying the minimums on the others), then move on to the account with the next highest rate and so on.

This might help you get out of debt faster and save you money over the long run by wiping out the costliest debt first. But depending on the balance, it might take a while to zero out that first debt. If quicker wins would motivate you, snowball may be a better method.

Debt avalanche exampleDebt avalanche example

You target the $4,000 card first because it has the highest rate (28%). Then you move to the $6,500 card (24%) and finally the $1,500 card (20%).

» MORE:Learn more about the debt avalanche method

If your debt is starting to pile up, high interest rates are likely the culprit.

Debt consolidation reduces the interest you’re paying by combining multiple debts into one monthly payment under a lower rate. This saves you money and usually helps you get out of debt faster, since more money goes toward paying off the principal debt. Plus, it’s a lot easier to focus on making one payment versus juggling multiple balances with different due dates.

A balance transfer credit card and a debt consolidation loan are the two main ways to consolidate debt.

Balance transfer cards

A balance transfer card is a type of credit card onto which you roll your existing credit card balances. These cards typically come with a 0% promotional period (usually lasting 15 to 21 months), in which you pay zero interest. That means you can pay down the balance — in this case, the debts you’ve moved onto the card — with no additional interest.

You typically need good or excellent credit (a 690 credit score or higher) to qualify for a balance transfer card. You’ll also pay a balance transfer fee, which is usually 3% to 5% of the amount transferred.

Balance transfer card exampleBalance transfer card example

You have $12,000 spread across three credit cards with APRs between 20% and 28%.

You move all this debt to a balance transfer card with an 18-month 0% APR offer. This requires paying a 3% balance transfer fee of $360.

Your new balance is $12,360. To clear it before the promo ends, you’d pay about $687 a month.

» COMPARE:Our picks for the top balance transfer cards

Debt consolidation loans

A debt consolidation loan is a type of personal loan you use to pay off all your debts in one go. You then pay back the loan with fixed interest over a set repayment term. Rates on debt consolidation loans range from 6% to 36%, and terms stretch up to seven years.

Debt consolidation loans are availableeven if you have bad credit, though it may be harder to qualify for a low rate. For a debt consolidation loan to make the most sense, you’ll want a rate that’s lower than your current debts.

Debt consolidation loan exampleDebt consolidation loan example

You take out a $12,000 loan at 17% APR with a three-year term to pay them all off at once. Your payment on the loan is about $428 a month. You’d pay about $3,402 in interest.

» COMPARE:Our picks for the best debt consolidation loans

Considerdebt relief if your total unsecured debt, like credit card bills, personal loans and medical debt, equals 50% or more of your gross income. Three paths toward debt relief are debt management plans, debt settlement and bankruptcy.

Debt management plans

Debt management plans are a type of debt relief program offered by nonprofit credit counseling agencies. Similar to the consolidation options listed above, these plans roll your debts into one payment at a reduced interest rate. However, you’ll need to permanently close any credit cards you enroll in the plan.

DMPs come with small startup and monthly fees, and there’s no credit score requirement. You can expect to pay off debt within three to five years with a debt management plan.

Debt management plan exampleDebt management plan example

You owe $20,000 across several cards at an average APR of 28%.

A credit counseling agency negotiates your rate down to 8% and sets up a four-year plan.

You pay about $488 a month, plus a fee of $30 a month. Over the plan, you’d pay about $3,440 in interest and roughly $1,440 in monthly fees.

» MORE:Explore the top debt management plans

Debt settlement

Debt settlement involves negotiating with your creditors to reduce the amount you owe.

You can try settling debt on your own by contacting your creditors directly or you can hire a third-partydebt settlement company to do it for you. The company will instruct you to stop making payments on your debts, so you can save for a settlement offer.

Debt settlement majorly hurts your credit score, and your creditors may even sue you. Consider the options above before pursuing settlement.

Debt settlement exampleDebt settlement example

You enroll $20,000 of credit card debt with a settlement company. You stop paying your card balances and save money in a dedicated account.

Eventually, the company settles your debts for $11,000. The company’s fee is 20% of the enrolled debt ($4,000), so you pay $15,000 in total.

» MORE:Learn more about how debt settlement works

Bankruptcy

Bankruptcy is a legal process that can help you “reset” if you can’t repay your debts at all. Chapter 7 and Chapter 13 are the two most common forms.

Chapter 7 erases most unsecured debts through liquidation, while Chapter 13 involves being placed on a court-approved repayment plan for three to five years.

Like debt settlement, filing for bankruptcy is a riskier debt relief option that can seriously damage your credit score.

» MORE:What to know about bankruptcy

How to put more money toward paying off debt

Regardless of the payoff method you choose, it’s essential you have the money to make regular payments on your debt. Here are some quick tips for maximizing cash flow.

Create a budget and stick to it

Getting clear on your budget can help you prioritize your spending.