The Best Credit Card Debt Repayment Options for Different Credit Scores

Your credit score often determines your options for paying down credit card debt faster.

by Andrea Norris-McKnight

Credit card debt can be crippling. So getting to a zero balance is important. We’re going to help you do that. So let’s get started!

There are two potential paths to reducing credit card balances. One is appropriate for people with good or excellent credit. The other is better suited for people with fair, poor or bad credit. What score qualifies as good?

Excellent Credit: 750+
Good Credit: 700-749
Fair Credit: 650-699
Poor Credit: 600-649
Bad Credit: below 600

Check Your Credit Score

Don’t know your credit score? Check with your credit card issuers. Many offer free credit scores to cardholders. Or you can get your score from one of these trusted resources:

If Your Credit Score Is Over 700

If your credit score is over 700, you’ll want to look into these options for reducing your credit card balances:

Transfer your credit card balances to a lower rate card.

Your good credit allows you to look for balance transfer cards. Some of them will even charge you 0% interest for a period.

Consolidate your credit card debt with to a personal loan.

You may also qualify for a lower cost personal loan.

Consolidate your credit card debt with a HELOC or Home Equity Loan.

If you are a homeowners, sometimes your best move is to move debt from a higher cost to a lower cost debt instrument, such as a Homeowner’s Line of Credit (HELOC) or Home Equity Loan. The loan costs less because you’re moving from an unsecured to a secured debt. In the HELOC or Home Equity loan, as you’d expect, the equity in your home guarantees the loan. Yes, home equity rates are high right now, but they are likely much lower than credit cards with 20%+ rates.

If Your Credit Score Is Under 700

If your credit score is under 700 and your balance is significant, you may need professional help to reduce your credit card balances. Many debt consolidation options won’t be available to you. Consider applying for credit counseling if your credit card balance is $10,000 or more. A credit counseling agency will attempt to get your credit card companies to stop charging late fees and may even get you reduced interest rates. Use our guidelines to find out if you are a good candidate for credit counseling.

About the Author

Andrea Norris-McKnight took over as the editor of The Dollar Stretcher and After 50 Finances after working under the site founder and previous editor for almost 15 years. She has also written for Money.com, GOBankingRates.com, HavenLife.com and The Sacramento Bee.

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