Should I Pay Off My Credit Card in Full or Over Time?

How Do Credit Card Balances Impact Your Credit Score?

Credit card balances primarily affect your credit score in two ways: credit utilization and payment history.

• Credit utilization ratio: Your card balances directly impact your credit utilization ratio, which measures the percentage of your available credit you're using on revolving credit accounts (mainly credit cards). This ratio is a significant scoring factor that makes up 30% of your FICO^® Score^Θ. Scoring models include your overall utilization rate based on your combined account balances, as well as the utilization rate for each of your revolving credit accounts individually. Generally speaking, aim to keep your utilization below 10%, but the lower the better.
• Payment history: Making consistent, on-time payments on your credit card accounts bolsters your payment history, which accounts for 35% of your credit score. If you don't make at least the minimum payment within 30 days of your due date, your lender may report the late payment to the credit bureaus. According to FICO, a single late payment on your credit report could lower a fair credit score of 607 by as much as 37 points and a very good score of 793 by up to 83 points.

While paying down your credit card debt gradually could strengthen your payment history over time, you may see a greater benefit by paying it in full because it lowers your utilization and eliminates interest charges.

Learn more: What Affects Your Credit Scores?

Should I Pay Off My Credit Card in Full?

In most cases, yes, you should pay your credit card balance in full if it's within your budget. Paying off your credit card in full will help you save money and protect your credit score. And if you use your credit card regularly, paying the entire balance by the due date spares you from interest charges on your balance.While paying off your credit cards in full is generally a good idea, a 0% utilization ratio can look like you never use your cards, leaving credit scoring models with less information to see how you manage your debt. Scoring models may view a very low ratio, such as 1%, slightly more favorably because it shows that you use credit cards, and do so responsibly. That doesn't mean you need to carry over a balance, however: Your credit card issuer will report your statement balance to the credit bureaus when your billing period closes, but you can pay off your balance by the due date and get the benefit of using your card while not incurring interest charges. The average credit utilization ratio of those with a perfect 850 credit score is 4.1%, according to FICO data.

While it's best to pay off your credit cards each month, it's not always financially feasible. If possible, aim to pay more than the minimum payment to minimize interest charges and chip away at your balance.

If you decide you want to zero out your balance, make sure you pay the current balance, not the statement balance. The current balance includes any new charges since your last statement closed. When you check your account online, you'll see the most recent statement balance as well as the current balance. You can also call your credit card company and ask them how much it will take to wipe out your balance completely.

Tip: If you want to use your credit card for convenience and rewards but are worried you could miss a payment, set up automatic payments for the full statement balance. Doing so can help you boost your credit while avoiding interest charges. Just make sure you have enough in your bank account each month to pay the full statement balance.

How Making Minimum Payments Can Cost You

Making only minimum payments will delay the amount of time it takes to eliminate your balance and cost you significantly more in interest charges.

Remember, you pay interest on any credit card balance that carries over from month to month, and those charges add up quickly. According to May 2025 Federal Reserve data, annual percentage rates (APRs) average a little over 22%. If you carry a balance from one month to the next, that interest compounds daily and is added to it at the end of the billing cycle. Future interest is then calculated on your new, higher balance. Interest charges will continue to mount in this way until the balance is paid off, which means your balance can grow even if you stop using your card.

Every dollar above the minimum you can apply to your credit card balance accelerates your payoff timeline and lowers your interest charges.

Example: Say you have a $5,000 balance on a credit card with a 22% APR and a minimum payment of about $142. If you make just the minimum payments, it will take you nearly five years (58 months) to pay off the debt and cost you over $3,121 in interest charges. If you can afford to add $100 to your monthly payment ($242 total), you could pay it off in less than half the time (27 months) and reduce your interest charges to $1,342, a 57% reduction.

Tip: Use Experian's credit card payoff calculator to see how long it will take to pay off your debt. Try entering different payment amounts above the minimum to see how much faster you could be debt-free and how much you could save on interest charges.

Credit card payoff calculator

How to Pay Off Credit Card Debt

U.S. consumers carried an average credit card balance of $6,730 in the third quarter of 2024, up 3.5% year over year, according to Experian data. That's not an amount most cardholders can pay off quickly—let alone all at once.

With a little planning and the right strategy, however, you may pay off your credit card debt sooner than you think. Here are some strategies to make it happen.

Debt Avalanche Method

The debt avalanche method of paying down credit card debt focuses on saving the most money on interest charges. After making minimum payments on all of your credit cards, put some extra money toward the card with the highest APR. Once it's paid off, move to the card with the next highest APR, and so on.

Debt Snowball Method

The debt snowball method of tackling credit card debt may motivate you to stick to your payoff plan by building momentum through quick wins. This strategy prioritizes putting extra money toward the credit card with the lowest balance while making minimum payments on the rest of your cards. After that card is paid off, apply the extra funds to the card with the next lowest balance, and repeat the process until you eliminate all of your credit card debt.

Debt Consolidation Loan

A debt consolidation loan is a type of personal loan that simplifies your credit card debt by combining all your card balances into one account with one payment. Additionally, debt consolidation loans differ from credit cards in that they are installment loans with a set payoff date you can circle on your calendar. Finally, debt consolidation loans typically offer lower rates than credit cards, but your rate may vary depending on your credit, income and other factors.

To gauge your odds of loan approval and what rate you may receive, consider prequalifying for a loan—or multiple—before applying. Prequalification allows you to compare several personal loan offers with only a soft credit check, which doesn't impact your credit scores.

Balance Transfer Credit Card

If you have good credit, applying for a balance transfer credit card with a 0% introductory APR period can help you strike down debt without interest charges slowing down your efforts. The 0% introductory period on some cards may last for up to 21 months, giving you considerable time to eliminate your balance or at least put a significant dent in it. However, you'll usually pay a balance transfer fee, typically 3% or 5% of the transfer amount. Also, any balance that remains after the introductory period expires will be subject to the credit card's standard rate.

Learn more: Best Balance Transfer Credit Cards

Credit Counseling

If your credit score is low, a debt consolidation loan or balance transfer card may not be a viable option, especially if you're struggling with your current payments. In this case, consider talking to a nonprofit credit counselor who can review your situation and suggest tactics to help you manage your money better and reduce your debt.

Credit counseling agencies may also suggest getting on a debt management plan, especially if your credit card debt is considerable. With a debt management plan, a credit counselor negotiates on your behalf with your creditors for reduced repayment plans, often with lower interest rates and waived fees. You then make a single monthly payment to the counseling agency, which disburses the funds to your creditors until your accounts are paid off.

Learn more: Ways to Consolidate Credit Card Debt

Follow Good Credit Habits and Monitor Your Credit

Paying off your credit card debt all at once could quickly strengthen your credit by lowering your credit utilization ratio. Using your credit card and paying it off every month also helps you save money on interest and build your credit over time. Still, these aren't the only ways to improve and maintain a good credit score. Paying your credit accounts on time, maintaining low debt balances and managing different types of credit are all good credit habits to practice.

Along those lines, only apply for credit you truly need, and check your credit reports regularly to make sure there isn't any inaccurate information that could potentially be fraudulent. Consider monitoring your credit for free with Experian to track your progress with daily updates.