How to Pay Off $10,000 in Credit Card Debt

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Key takeaways

The best way to pay off credit cards depends on your finances and priorities.
You can negotiate with creditors for a lower interest rate or lump sum payment.
Debt consolidation helps you get out of debt efficiently and for less.

Credit card debt is growing at a surprising rate. Total balances in the U.S. increased by $45 billion in the fourth quarter of 2024, according to the Federal Reserve Bank of New York. As inflation continues, more Americans rely on credit to cover the rising costs of everyday items.

Racking up $10,000 or more, swiping your card is easy to do. Exceptionally high interest rates only worsen the problem. As balances rise, paying off credit card debt becomes harder.

The good news is credit card debt relief programs can help reduce or eliminate your balances. When you’re ready to pay off $10,000 in credit card debt, we have strategies to explore.

Best ways to pay off credit cards

The best way to get out of debt depends on how much you can pay each month and what motivates you. When your credit card debt hits $10,000, you need a good plan to handle it.

You have a few options, even if your credit score isn’t stellar. You can take out personal installment loans for bad credit and use the money to repay debts. You can also explore negotiating directly with your creditors. Or you can enter a debt management plan.

The best debt relief options will help you pay off what you owe efficiently and for less.

Debt negotiation

Credit card debt negotiation involves working with creditors to pay off your balances. You can negotiate a settlement where you’ll pay a reduced amount, a lower interest rate, or a repayment plan. Understanding how to negotiate credit card debt can help you reduce your payments and get out of debt faster.

Many credit card companies are willing to negotiate, especially if you are facing financial hardship. Ask if they offer payment plans that lower your monthly payments to an affordable amount. They may be willing to defer payments for a time as well. The benefit of payment plans is that you repay what you owe, improving your credit score.

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Benefit from credit card debt forgiveness

Credit card debt settlement is when you pay a lump sum less than the full amount. Your creditor then forgives the remaining balance. That is why it is also called credit card debt forgiveness.

Settling debt can help you save money and offer immediate relief. The problem is that it will have a negative impact on your credit. The IRS also considers forgiven debts over $600 as taxable income.

You can do a debt settlement negotiation on your own or work with a third party. The benefit of working with a debt settlement company is that they have skilled negotiators who work on your behalf. The drawback is they charge a fee of 15% to 25% of the original debt for their services. You only pay the fee if they successfully negotiate a settlement.

Is debt settlement worth it? Settlement can be worth it if you owe more than you can possibly repay and have no other options. It can be a last-ditch effort to avoid bankruptcy.

Credit card debt consolidation

Using a personal loan to pay off credit card debt can simplify your bills, save you money on interest, and help you pay off balances faster. Here’s how it works.

You take out a loan and use the money to repay your creditors. Personal loans have lower interest rates and fixed payments. You end up with one affordable monthly bill.

The average credit card interest rate is 24.20% APR, while the average personal loan APR is 12.37%.

Besides saving money and simplifying your finances, you can consolidate credit card debt without hurting your credit. All you need to do is pay your bill on time every month. You may not save as much money as with settlement, but your score will benefit.

If you have a poor score, you may still qualify for debt consolidation loans for bad credit. The catch is they often have higher interest rates. Do the math to make sure that you will actually save money.

Some lenders advertise guaranteed debt consolidation loans for bad credit but be cautious. There is no such thing as guaranteed approval. Even lenders that do not check scores have other criteria you must meet.

Can you get a loan without a job but with good credit? Some lenders may approve you based on your credit history. You can often include other sources of income like child support or government benefits. Only borrow what you can afford to repay. Otherwise, you’ll end up deeper in debt.

Research top lenders for personal loans and prequalify before you apply. Prequalifying will let you compare interest rates, fees, and repayment terms without affecting your score. Select the loan that gives you the best rate and apply.

The next step is to pay it off. The goal of consolidation is to save on interest and simplify payments. You still have to pay on time every month.

Home equity loan

A home equity loan lets you borrow money against the equity you have in your property. Equity is your home’s current market value minus your mortgage balance.

With a home equity loan, your property serves as collateral. If you fail to repay, the lender may foreclose on your home.

The advantage of using a home equity loan is they have fixed monthly payments at a low interest rate. Typically, it is even lower than personal loans. They are a cost-effective but risky way to consolidate debt.

If you prefer more flexibility, a home equity line of credit (HELOC) lets you borrow as needed. Be sure to compare home equity line of credit rates to find the best deal.

For borrowers with poor scores, getting approved can be difficult. Some lenders may advertise a guaranteed home equity loan with bad credit, but these often come with high fees or strict terms.

Before using home equity, consider the risks. Your home serves as collateral, meaning missed payments could lead to foreclosure. If you are sure you can repay, a home equity loan can help you pay off credit card debt for less.

Seek credit counseling

Nonprofit credit counseling agencies can help with credit card debt over $10,000. These agencies offer debt management plans (DMP), financial education, and budgeting. They are a good place to go for hands-on help.

Debt management plans roll all your bills into one with an affordable monthly payment. The agency works with creditors to negotiate lower interest rates or waived fees.

DMPs are similar to debt consolidation loans, except that your credit score does not matter. All that matters is that you can afford the monthly payments.

Tricks to paying off credit cards

Paying off credit card debt takes discipline. You have to be consistent in making payments every month. But a few clever tricks can make it easier.

First, always pay more than the minimum. Minimum payments barely cover interest, keeping you in debt for years. Read the “Minimum Payment Warning” on your credit card bill. It shows how long it will take you to pay off the balance and how much interest you’d pay if you only make minimum payments.

Increasing your payments reduces interest costs and helps you pay off outstanding balances faster. Pay as much as you can each month.

When you have multiple credit cards to pay off, it can be hard to decide which to prioritize. Two popular methods are the snowball method and the avalanche method.

The snowball method focuses on paying off the smallest balances first while paying the minimum on all the rest. Once you pay off the smallest debt, you put that money towards the next smallest, and so on. The advantage of the snowball method is that it gives you quick wins.

The avalanche method prioritizes high-interest balances first, saving you the most money in the long run. It tends to be faster and cheaper than the snowball method. Choose the approach that works best for you. Motivation to keep going is the most important consideration.

You will avoid late fees and interest rate hikes. You’ll establish a positive payment history boosting your score.

The key is consistency and commitment to the plan that best fits your budget.

How to pay off $10,000 in 6 months

How long it takes to pay off $10,000 in credit card debt depends on how much you can afford to pay each month. If your goal is to pay it off within six months, you need a solid strategy and disciplined budgeting.

Repaying $10,000 in six months means paying roughly $1,667 plus interest each month.

Let’s address the interest first. You have a few choices regarding lowering the amount of interest you’ll pay. You can take out a debt consolidation loan. Transfer your balance to a balance transfer credit card with a 0% APR. Or negotiate a reduced rate with your creditors.

Next, you need to find extra cash to put towards your debt. Cut unnecessary expenses. Negotiate with service providers for better deals on internet plans, phone bills, and car insurance. Consider taking on a side gig or working overtime to increase your income.

Finally, consider debt settlement. Instead of paying your creditors each month, put the money aside. Once you’ve saved up enough for a lump-sum payment, reach out and negotiate with them. Since you have not been paying your bills, they may be willing to settle for less.

Debt settlement can get you out of debt for less, but it is risky. There is no guarantee that your creditors will negotiate. It can take a while to save up for a payment. As you save, your interest will compound, and your balances will grow.

Sticking to a budget and making extra payments is the best way to repay creditors. Consider the avalanche or snowball methods to help you prioritize payments. Look into consolidation to reduce interest rates and make repayment more manageable.

While it may take longer than six months to repay $10,000 in credit card debt, it is entirely doable.

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Frequently asked questions

1. How to get rid of credit card debt?

You must pay more than the minimum each month to get out of debt. The snowball method is a good place to start since the quick wins can motivate you to keep going.

2. How do you negotiate credit card debt?

Call your credit card issuer and explain your financial situation. Ask for lower interest rates, a temporary forbearance, or a lump-sum settlement for a reduced balance. If you do not want to negotiate, you can get help from a credit counselor or a debt settlement company.

3. How to get $10,000 fast?

A personal loan is the easiest way to borrow $10,000. Many lenders offer same-day approval, especially if you apply before noon on a business day.

Bottom line

No matter how large your credit card balance, paying it off is possible. Whether you negotiate, seek forgiveness, or consolidate your payments, you can become debt-free. It may take some time, but there are plenty of solutions for every financial situation. The key is to take action, stay committed, and find the best strategy for your budget.

Once you’ve successfully paid off your debt, the next challenge is staying out of it. High-interest credit cards can easily trap you again if you’re not careful. You need to keep an eye on your spending. Only charge what you can pay in full each month.

Save up for unexpected expenses. When you have savings, you do not have to rely on credit or emergency personal loans that can lead to debt.

As you build good financial habits, your score will increase, and you’ll stay debt-free.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor’s credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor’s degree in journalism and an MBA.

How to Pay Off $10,000 in Credit Card Debt

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