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Bottom Line Up Front

  • Reducing credit card debt can help you find peace of mind, may improve your credit score and save you money on interest.
  • If you have a high interest rate on your credit card, requesting a lower rate from your lender could be an option. 
  • A balance transfer can help move debt from several cards onto one card with a single due date. This can simplify repayments and lower your interest rate.

Time to Read

6 minutes

May 7, 2022

Looking to get personal finances on track with less credit card debt? We have you covered. Paying off debt is a huge victory, and so is each step you take to get started. By reducing what you owe creditors, you’ll likely have more peace of mind and save money on interest. There are a few things you can do to help ease credit card debt and make it more manageable. 

Rate Reduction Request

If a high interest rate on your credit card makes repayment hard, keep in mind that you can request a lower rate from your lender. Credit card interest rates aren’t always set in stone. You may get a lower rate just by asking—many succeed this way.

Maybe your financial situation has improved since you opened the card but your interest rate hasn’t dropped. That gives you a good case for a reduced rate. A credit history with regular use of the card and on-time monthly payments may also work in your favor.

Before you make the call, gather details that support your request. If your lender agrees to a lower rate, ask for confirmation in writing and the date you should expect to receive it. 

By lowering the interest rate on your credit card, you’ll pay less in interest each month. Then, you may be able to put more toward your balance.

Balance Transfer

If high interest rates are in the way, transfer your balance to a card with a lower rate at another financial institution. A balance transfer can also help with debt management by allowing you to merge debts from several cards onto one card with a single due date.  You’ll simplify your payments and lower your interest rate. 

Balance transfer offers typically come with a low, introductory interest rate. In some cases, it's 0%, but the rate increases after a specified amount of time. You can pay back your debt faster if you make more than minimum payments and ramp up repayments before the introductory rate ends. 

Keep in mind that when your introductory rate expires, it may be tempting to seek out another balance transfer to avoid paying interest even longer. Be aware that if you keep moving your balance to low-interest credit cards but maintain a high balance, you may hurt your credit score. If you’re transferring to consolidate debt, make sure the combined balance doesn’t exceed 30 percent of the available credit limit on your new card. A high credit utilization ratio may bring down your credit score.  

Should I Cancel My Credit Cards to Manage My Debt?

When facing credit card debt, canceling your card may seem like a good idea to stop the cycle. On one hand, this will allow you to make payments without any new charges. On the other, it could bring down your credit score in a few ways. Canceling your credit card could have a negative effect on your credit score. Why? Because your score may be impacted by these factors. 

  1. Payment history: Even though the card is canceled, credit reporting agencies may still judge your payment history. Good payment history could help your score and remains on your report for 10 years. Any late payments will stay on your credit report for up to 7 years.
  2. Utilization rate: Closing a card lowers your available credit without reducing what you owe. As a result, your credit utilization ratio, which you should aim to keep below 30 percent, will increase. 
  3. Mix of credit: The more diverse your lines of credit, the better your score could be. Thus, canceling a card might not be helpful. If the card you cancel is your only credit card, your mix of credit will be affected. There’s more to canceling your card than cutting it up. Your cardholder agreement (usually available on the credit card issuer website) specifies how to officially close your account. Generally, you should call the issuer and follow up with a written notice.

Credit Counseling

Calling on a professional is a great way to get advice specific to your financial situation. You can work with a credit counselor—often free through a nonprofit agency or a financial institution like Navy Federal Credit Union. The pro will review your bills and budget to help you find the best debt-relief options for you.

Credit counseling can provide a clear path to debt management. It can show the steps you need to take to become debt-free. And, credit counselors can help you change your spending habits and teach you money management skills.

Start Your Debt Management Plan Today

It’s never too late to start managing your debt and gain financial strength. Having a debt management plan can help you reduce credit card interest rates, consolidate debt and pay off debt faster. For more tips and resources on managing your credit score, visit our Mission: Credit Confidence® Dashboard. Take control of your finances and gain confidence in your spending habits by starting your debt management journey today. 

Next Steps Next Steps

  1. Set up automatic transfers to pay your credit card payment on the due date to avoid late fees
  2. Create a budget, write down all your expenses for the month (mortgage/rent, utilities, cell phone bill, insurance, groceries, transportation, loan payments, etc.), add them all up and compare the total to your income so you charge less to your cards.
  3. If you need personalized financial guidance, we can help with goal setting, budgeting and financial recovery.


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.