Fastest way to clear credit card debt – what is it?

Posted on 14 September 2022

Written by Samantha Galea

Debt is challenging for most of us to pay off. There are many causes of debt, and before you know it, it can quickly accumulate. If you find yourself in a situation where your debt is becoming overwhelming, it is important to speak to a Licensed Insolvency Trustee as soon as you can. As the only professionals legally able to file all forms of debt relief in Canada, they can offer quick and impartial advice on the recommended steps for you to take. Often, most of us want to pay off debt fast, but credit card debt can be a different kind of ball game. It is all too easy to put purchases onto credit cards and worry about the consequences later. Although paying off your credit card debt can seem like an impossible task, particularly with limited income, there are ways to deal with it no matter how bad you may think your situation is. Currently in Canada, the average credit limit rests at $5,800, and with a rising cost of living and soaring interest rates, this is only going to get worse. If you want to get out of debt quickly, here are our strategies on the fastest way to clear credit card debt.

What is the fastest way to clear credit card debt?

There are various strategies you can take to clear your credit card debt, although frankly your quickest option is to contact a Licensed Insolvency Trustee. As experts in helping Canadians gain debt relief, they are best placed to quickly review your financial circumstances and recommend a pathway for you to clear both credit card debt and any other forms of unsecured debt that you may have. Most often, this includes filing one of the below:

Consumer proposal

A consumer proposal is a legal form of debt settlement that can reduce your debt by up to 80%. It is the process of proposing a manageable amount to repay each month. Most creditors will likely accept a consumer proposal as it has better consequences for them than if you were to file a bankruptcy. A Licensed Insolvency Trustee is required to file a consumer proposal, and they will help to negotiate with your creditors on your behalf. As well as a huge reduction in your overall debt, consumer proposals have a number of advantages including a stay of proceedings which prevents your creditors or collection agencies contacting you or pursuing legal action against you. It can be considered the fastest way to clear credit debt as you can quickly have a huge reduction in the amount you owe. At Spergel, unlike other bankruptcy firms, you will receive your very own Trustee to walk you through each step of the consumer proposal process, instead of passing you from person to person.


Filing bankruptcy is the process of assigning any of your non-exempt assets over to a Licensed Insolvency Trustee in exchange for the clearance of all your unsecured debts. It is the best way of gaining a fresh financial future, free from the worries and stresses of overwhelming debt. Although many Canadians think that bankruptcy leaves you with nothing, this is not the reality. Each province offers bankruptcy exemptions, which entitles you to keep some basic assets like a vehicle for work, or clothes. As bankruptcy clears your unsecured debts, provided you can keep up your payments on secured debts like your mortgage or car loan, you can continue to keep your home and car too. Other advantages of bankruptcy include a stay of proceedings to offer full protection from your creditors. Although bankruptcy can seem like an intimidating process, the Licensed Insolvency Trustees at Spergel are here to help you through each and every step of the bankruptcy process. We have been helping Canadians through bankruptcy for over thirty years and are here to help you too.

What are the best practices to pay off credit card debt quickly?

If you do not feel you need to file a consumer proposal or bankruptcy, you may want to look at other ways to pay off your credit card debt. Here are some good practices to follow:

Understand your credit card debt

If you want to gain debt relief, you need to understand first of all why you are in debt. Are you simply spending too much on your credit cards? Is it a one-off due to an unfortunate circumstance, like a divorce or substantial medical expenses? By understanding why your credit card debt has come about, you can begin to look to the root of the problem and work towards a solution. If you are spending beyond your means, you may wish to look at how to budget, or try to increase your income. You should also work to understand exactly how your credit cards work. Do you know exactly what the interest is on your credit card? Do you know what your minimum payments are each month? And how does it impact your credit score if you do not make your credit card payments on time? Finally, you need to understand exactly how much you owe. This may extend beyond your credit cards to loans, a mortgage, and any other debts you may have. You should list out this comprehensive list along with the respective interest rates.

Create a credit card payment plan

Now that you understand your credit card debt, you need to work out the fastest way to clear credit card debt. To do so quickly, you will need to make more than the minimum payments required. There are two popular credit card payment strategies – the debt snowball method, and the debt avalanche method.

The debt snowball method

The debt snowball method is one of the fastest ways to clear credit card debt. This strategy is focused around paying off your smaller debts first while making the minimum payment on all your other debts. Once you have paid off the smallest debt, you then work on the next smallest debt until all of them are repaid. You may have multiple credit card debts, and you can therefore prioritize them in this order. It uses motivational tactics, with the idea that you will be encouraged to make repayments with the instant gratification of achieving quick wins.

The debt avalanche method

The debt avalanche strategy is another of the fastest ways to clear credit card debt, and it is arguably the most cost effective form of credit card repayment. It is focused around paying off your highest interest debts first. You then move onto the next highest interest rate debt, and so on. This approach saves you money longer term as you pay less in overall interest costs, and therefore it clears your balances faster. The longer you have the debt, the higher the interest you will pay.

Budget for credit card debt repayment

Now you have a credit card payment plan, it is time to begin putting the funds aside to pay down your debt each month. This involves creating a budget that includes your income and expenses, allowing you to allocate a set amount of money for your debt repayment. In this scenario, making your minimum payment will not work when it comes to the fastest way to clear credit card debt. Otherwise, you will carry your credit card balance and pay interest each month without reducing the principal of your debt which will take you much, much longer to pay off your debt. Check out our guide on how to budget.

Avoid using your credit cards

It is much easier to spend beyond your means when using a credit card as opposed to spending tangible cash. Cash leaves your property as soon as you spend it, while a credit card creates an air of having more funds that you actually do. While closing your credit card accounts can affect your credit score, we advise cutting them up or hiding them so that they are difficult to access. Using your budget, you may wish to separate your funds into envelopes for each of your different planned expenses to prevent overspending.

Reduce your expenses

As part of budgeting, you will need to figure out where you can pull back on your expenses. Part of this includes tracking your spending so that you know exactly where your money is going each month. By changing your spending habits, you can expect to free up some additional cash to go towards your credit card debt repayment. Some simple ways to save money each month include getting less takeouts and cooking more; negotiating a reduction in your bills with your provider; quitting smoking; carpooling or cycling to work instead of driving; cancelling any unnecessary subscriptions; and saving on grocery shopping where possible. You should also try to earn cash back when making purchases for savings in the long term.

Start additional income streams

In order to repay your credit card debt more quickly, you may want to look at other forms of boosting your income. Side hustles or part time jobs can be a great way of doing so. Some examples include blogging, proofreading, teaching English, dog walking, and babysitting. It is a good opportunity to go through your possessions too, to see if there is anything that you may want to sell for some extra cash. When you get a salary increase or a bonus, you should try to put this towards your credit card repayment too.

Negotiate a lower interest rate

It is always worth contacting your credit card company to request a lower interest rate on your debt. Although there is no guarantee they will reduce your rate, if they do it could save you hundreds of dollars in interest each year, so it is certainly worth asking. Negotiation can take patience and persistence. If you call, make sure to be polite, and try again if the first time does not work out.

Credit card debt can have devastating effects upon our mental health, relationships, and morale, which is why it is important to understand the fastest way to clear credit card debt. If you have concerns or questions about your credit card debt, book a free consultation with a Licensed Insolvency Trustee at Spergel. We have helped over 100,000 Canadians gain debt relief, and we are here to help you too.


Samantha Galea

Samantha Galea is a Chartered Insolvency and Restructuring Professional and LIT (Licensed Insolvency Trustee) who started working with Spergel as a summer student in 2010. With her socio-political background, Samantha is committed to breaking the stigma associated with bankruptcy so that individuals and families can properly understand all of their options on their path to debt freedom. She is also our resident expert on student debt and collection agencies, as well as the manager of our Brampton office. Outside of work, Samantha is an avid reader of historical non-fiction and world traveler.

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