How to pay off $20K in credit card debt

It’s possible to pay off $20,000 worth of credit card debt, but the longer you carry a balance, the harder it can be to pay off

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If you have $20,000 in credit card debt, here’s how you can make progress toward paying off those balances. (Shutterstock)

If you’re juggling a large amount of credit card debt — say, $20,000 — managing multiple high-interest balances and payment due dates can be stressful. 

By planning ahead and using certain debt repayment strategies, it’s possible to eliminate your credit card balances. Here’s how to pay off $20,000 in credit card debt

A personal loan is one tool for paying down high-interest credit card debt. Credible lets you see your prequalified personal loan rates from various lenders, all in one place.

How to pay off $20K in credit card debt

Having a large amount of credit card debt can feel overwhelming, but using a debt repayment strategy can help you get out from under your debt. 

Switch to cash or debit card

While credit cards can help you build credit, if you can’t afford to pay off your balance in full each month, you can end up with pricey interest charges that increase your debt. 

Reducing your credit card usage by making purchases with cash or a debit card can help you avoid accumulating additional credit card debt. You can reserve credit card use for when it’s necessary for additional security, like shopping online. 

If you have credit card debt, the benefit of using a debit card is that you’re making purchases with your own money. Because of this, you won’t have to worry about spending more than you can afford to or carrying a balance that will accrue interest.

Visit Credible to compare personal loan rates from various lenders, without affecting your credit score.

Set achievable goals

As tempting as it can be to throw every spare dollar at repaying your credit card debt, progress can be much more sustainable if you set achievable goals. 

Starting out small may make the challenge of paying your debt down feel more manageable. Start by setting a timeline for paying off one card (while still making minimum payments on your other debts). Then you can rinse and repeat the process for the rest of your credit cards. 

Consider these two debt repayment strategies to help you pay down and eliminate your credit card balances:

  • Debt snowball method — You’ll focus any extra payments you can afford to make on your credit card with the lowest balance, while making minimum payments on your other cards. Once you pay that card off, you’ll put that payment amount toward the card with the next-smallest balance, and you’ll repeat this until you pay off all your debt. This strategy can be motivating if you like having quick wins.
  • Debt avalanche method — This method helps you save more on interest, but it may feel less motivating because you won’t see your balances disappear as quickly. With the debt avalanche method, you’ll focus on paying off the card with the highest interest rate first. When that card is paid off you’ll move on to the one with the next-highest interest rate, and so on.


Create accountability

Paying off debt takes a lot of work and willpower. Having accountability as part of your debt payoff strategy can make it easier to stick to your plan. 

Consider asking a friend or family member to be your accountability buddy. You could also work with a nonprofit credit counseling agency, which will help you make a plan for paying off your credit card debt and help hold you accountable for making progress.

Should you take out a personal loan to pay off $20K in credit card debt?

Whether you should take out a personal loan to pay off $20K in credit card debt is an individual decision, but it can be a helpful debt consolidation tool for many reasons:

  • Lower interest rates — Personal loans tend to have lower interest rates than many credit cards, which can save you money on interest as you’re paying down your debt.
  • Definite payoff date — When you take out a personal loan, you’ll have a clear end date for when the loan will be paid off. This can be motivating and help hold you accountable.
  • Fixed rate that won’t change — With a personal loan you’ll have a fixed interest rate that won’t change, making your monthly payments easier to budget for.
  • One payment that’s easy to keep track of — Having only one payment to keep track of can make your debt more manageable. You can also set up automatic payments to ensure you never miss a payment.

If you have bad credit, it may be more challenging to qualify for a personal loan (especially one with lower interest rates than you’re paying on your credit cards). But adding a cosigner with good credit to your loan application can help increase your chances of approval and may help you get a lower interest rate.

If you’re ready to apply for a debt consolidation loan, Credible lets you quickly and easily compare personal loan rates to find one that works for your situation.

Should you use a balance transfer card to pay off credit card debt?

Using a balance transfer credit card — especially if you can qualify for a 0% introductory APR offer — is another way to pay down $20K in credit card debt. But it requires some discipline.

Some balance transfer credit cards offer 0% APRs for as long as 18 or 21 months. If you can focus on paying down your debt in this time frame, all your payments will be going toward your principal and you won’t accrue additional interest. But if you’re still carrying a balance when the intro period expires, you’ll start accruing interest at the card’s regular rate, which can be just as high (if not higher) than what you were paying on your existing credit cards.


What about debt settlement or bankruptcy?

Even if you’re carrying credit card debt of $20,000 or more, you should only consider bankruptcy or debt settlement as last-resort options. 

  • Bankruptcy — Depending on the type of bankruptcy you file for (Chapter 7 or Chapter 13), you may either have some debts fully discharged or make a plan with the court to repay your debt. Bankruptcy can damage your credit and remain on your credit report for up to 10 years, which can make it difficult to buy a home or get approved for additional credit products.
  • Debt settlement — Debt settlement companies say they can negotiate with your creditors on your behalf to lower or even settle your debt. But they can charge expensive fees, your creditors might not be willing to negotiate, and there’s no guarantee your debt will be settled. Using a debt settlement service can also have a negative effect on your credit.