How to Pay Off Credit Card Debt Without Settling

by braniac ; Updated July 27, 2017
Pay Off Credit Card Debt Without Settling

Items you will need

  • Credit cards with high balances.
  • A job.
  • A phone.
  • The willingness to pay off the debt that you charged and agreed to be responsible for.

During these financial hard times many consumers are looking for ways to pay off debt and reduce expenses.

Many of us have high credit card balances in combination with job loss, wage reduction, or other unforeseen expenses. This may make paying off the credit card balances seem impossible at the worst or take many years at the best.

One possibility is settling with your credit card company to pay off your balance for less than you owe (usually 30-70% of the original balance). This may be a good option if you are close to declaring bankruptcy and you think this will help you avoid it. The drawback is that this will have a negative effect on your credit report for up to 10 years.

However, first you may want to work with your credit card company to work on a payment plan instead.

Step 1

Stop using your credit cards. Cut up all your cards or take them out of your wallet/purse. Pay for your expenses with cash or debit card.

Step 2

Make a spreadsheet of all your credit cards with issuing bank, account number, and balance. Make sure you include every card along with an accurate balance so you know exactly what your situation is.

Step 3

Call each credit card company and ask if you can be put on a payment plan with a reduced interest rate. This is the important part - if your interest rate is high (probably 20% or more if you have been late making payments) this will hopefully reduce the rate to around 4%.

Step 4

This is important: If the credit card company will not agree to a payment plan with a low interest rate, stop paying your minimum payments. Instead save the money. If you are already late on your payments, stop making payments altogether.

Step 5

If you had to stop making payments, contact your credit card company every month and ask for a payment plan. If they call to collect payment, say that you want to be put on a payment plan with a reduced interest rate. Tell them that you cannot afford to cover all of your household bills and paying large minimum payments that are almost all interest doesn't make sense when that money can buy food or pay the heating bill instead.

Step 6

You will most likely be given a fixed payment amount that will pay off your debt in a certain amount of time, maybe three to five years. It's a good idea to set up automatic payments and budget this amount. Keep making these payments on time so your credit report shows that you are current and stick with it until your balances are paid off.

Step 7

Most important - do not start using your credit cards again! Enjoy being free of credit card debt.


  • Stick to paying off your debt. If you are having trouble paying all the bills, here are some ways you can save money: Bring a lunch to work instead of eating out. Cancel your home phone service if you have a cell phone. Cancel your cable/satellite TV. If you have Internet service, you can watch most of the shows online (most computers can be hooked up to the TV so you can still watch it there). Use the time you would normally spend channel flipping to do something productive. Go out less. There are plenty of things you can do cheap, like go on a bike ride. Bar tabs can get expensive, and if you go to the movies don't go crazy at the snack bar.


  • Unfortunately, creditors are more likely to work with you when you are significantly past due on your accounts. If you are already past due, you don't have much to worry about. If you are current on all accounts be aware that your credit report will be temporarily affected by stopping payments.

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