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Your credit card debt is probably costing you more than you think. But you can fix that and save money by clearing it as quickly as you can.

I try to pay by credit card as much as I can for two reasons. One, I earn 1% cashback on most of my spending, and two, I know I can pay the full amount off every month.

Yet if those two weren’t the case, especially the last one, I’d avoid credit cards on almost all occasions (there are some exceptions). Misuse credit cards and the debts you build-up could cost you far more than you realise.

Here are five ways to clear your cards faster – whether you’re just mismanaging your repayments or you’re struggling with an unmanageable debt.

Pay it off with savings

You’re probably being charged around 19% interest on your credit card spending. Possibly even more. So if there’s £500 on there, that’ll add on nearly £8 for the first month alone.

But if you’ve got that cash in savings, even the best buy current accounts at 5% a year will only make you £2 in the same month.

So if you were to pay off the card rather than keep cash in savings you’d save £6 a month. And it’ll be a much bigger saving if you’ve got a larger debt.

It’s good financial sense to have access to emergency cash, but if you have a credit card available, then consider that as your back up and clear the debt.

Transfer it to a 0% card

A zero percent balance transfer card allows you to move your existing credit card debt to a new one which doesn’t charge ANY interest for a set time.

This is a good alternative to paying off the debt straight away and it’ll give you some breathing space to cut down the card.

Have a plan of how you’ll pay off the card before the 0% period ends, ideally a set amount each month.

You can get ridiculously long 0% cards now, though if you think you under two years is enough it’s possible to avoid paying a transfer fee.

> More on 0% Balance Transfer credit cards

Pay as much as you can each month

It’s amazing how many people don’t realise just making the minimum repayments is a bad thing.

Yes, you need to do it each month to avoid nasty extra fees, but they aren’t a good way to pay off a card.

Most minimum repayments are a percentage of the debt. So as you reduce the debt, the payments get smaller and smaller. This means it takes ages to pay off the debt. For example a £500 debt at 19% would take close to 18 years to clear and cost £842 in interest (based on paying just 2% each month).

Really you should be paying as much as you can. Doing this will reduce the interest you pay and clear the cards faster. So £25 a month will clear it a £500 debt in two years at the cost of £95. That’s a saving of more than £700!

To see what you could save on your debt there are a variety of calculators, including this one from Money Saving Expert.

Join more than 11,500 other subscribers to get Andy’s newsletter PLUS an exclusive £17 cashback offer if you’re new to Quidco.

Set up a direct debit

Even though I always pay off my cards in full, there was one time where I forgot to post the cheque (yes, this was a few years ago). If I hadn’t remembered and phoned the card provider on the due day the missed payment would have impacted my credit score and added penalty charges to my bill.

To avoid this, I set up a direct debit to guarantee payment is made every month. You do need to make sure you have enough in your current account though – otherwise you could get hit by overdraft charges.

Get a low rate, long-term card

If you’ve got large or multiple credit card debts, or don’t have the credit rating to get a 0% card, you should look to consolidate your cards at a lower monthly interest rate.

This could be around 5% or 6%, a significant reduction from the rate you’re currently paying.

For example, a £500 debt at 6%, with £25 month payments, will cost £27 in interest – £68 less than keeping it on a 19% card.

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