If you’ve fallen into a hole of debt, it can feel impossible to dig your way out. But conquering $10,000 in credit card balances is possible with a solid payoff plan. Plus, there are ways to reduce your borrowing costs, including using a personal loan to pay off credit card debt or negotiating better terms with your creditors. If you’re ready to get out of debt, here are six strategies for paying off your credit cards.
Before you can pay off $10,000 in credit card debt, it helps to know exactly what you’re facing. Start by gathering the details for every credit card in your wallet. Write down this information for each card:
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Current balance
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Interest rate
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Minimum monthly payment
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Payment due date
You can also crunch the numbers on how much interest you’re paying on each card. For example, a $10,000 balance at a 20.97% rate (the current average among credit cards) costs about $174 in interest each month.
By getting clear on these costs, you can determine exactly how much you have to pay to get debt-free by your target date.
Your next step is making a budget so you can see where your money goes. Record your income and expenses, including fixed expenses such as rent or mortgage payments, and variable expenses like groceries and utilities.
With a budget, you’ll see how much you can realistically afford to put toward your credit card debt each month. You can use a simple spreadsheet or a budgeting app to track your cash flow each month.
Tip: If you’d like assistance, consider working with a nonprofit credit counselor through an organization like the National Foundation for Credit Counseling or the Financial Counseling Association of America.
Once you’ve created your budget, look for areas where you can decrease your spending or increase your income. You might be able to cut back on restaurants, entertainment, or streaming subscriptions, for example.
Cooking at home more often, reducing impulse buys, or cutting out other nonessentials are a few other ways to free up extra cash to put toward your credit card debt.
On the flip side of the coin, consider ways to bring in extra income. This could include anything from working toward a promotion at work, snagging a side hustle, or selling your old clothes or other home goods. Whether by spending less, earning more, or both, taking these steps could help you pay off your $10,000 of debt faster.
If you’re carrying debt across multiple credit cards, you might not know which balance to prioritize. Two approaches you can use are the debt snowball and the debt avalanche strategies.
With the debt snowball method, you make extra payments on your card with the smallest balance (while keeping up with the minimum payments on all your other accounts). Once you’ve paid that balance off in full, you move on to the card with the next smallest balance. Repeat until you’ve got your debt under control.
The debt avalanche approach, on the other hand, has you prioritize the credit card with the highest interest rate. You make extra payments on that card before moving on to the card with the next highest rate, and so on.
The debt avalanche will save you the most money on interest, while the debt snowball may feel more motivating as you close out smaller balances faster and reduce the number of accounts you have to track. There’s no one-size-fits-all approach; just choose the strategy that will keep you moving forward.
Related: Credit card payoff calculator
Using a personal loan to pay off credit card debt can simplify repayment, save you money on interest, and help you pay off your debt faster. With a debt consolidation loan, you replace your current debts with a single personal loan with a fixed monthly payment.
Depending on your credit profile, you may qualify for a better interest rate than you have now. Personal loan rates currently start around 7% to 8% — with the average rate on a two-year personal loan at 11.65% — while the average credit card rate is much higher at 20.97%.
After you consolidate, you’ll no longer have to juggle multiple credit card balances with different interest rates, payment due dates, and creditors. Some personal loan providers will pay off your credit card balances for you, so you don’t have to do the legwork yourself.
This option is best for creditworthy borrowers who can qualify for a competitive interest rate. Many lenders let you prequalify online, so you can compare loan offers without impacting your credit score.
Keep an eye out for fees that could increase your borrowing costs, such as an origination fee. You want to make sure consolidating your debt will ease your debt burden, not add to it.
Your credit card issuer may be open to negotiating terms, especially if you’re concerned about missing payments. Call up the company and ask if they’d be willing to reduce your interest rate, lower your minimum payments, or waive some fees.
While there’s no guarantee of success, it’s worth a try — especially if you’re a longtime customer with a solid record of making payments. Another option is working with a credit counselor who can negotiate on your behalf.
You could contact a nonprofit credit counseling agency and work together to create a debt management plan. Your counselor will try to negotiate better terms on your $10,000 credit card debt.
You’ll typically send payments to the credit counselor, who will apply those payments to your debt. While this approach can be helpful if you need extra support, it will likely come with setup or monthly fees.
Paying off $10,000 in credit card debt is no easy feat, but you can accomplish it with focus, discipline, and the right strategies. Following a budget and consolidating with a personal loan, for example, are two steps that can help you hit your debt payoff goals.
Once you’ve removed this weight from your shoulders, you can redirect your money toward other aims, such as building an emergency fund or saving for retirement. Moving forward, be mindful of your credit card use and try to pay your balance in full each month to avoid slipping back into debt.
