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By Angelica Leicht
Edited By Matt Richardson
/ CBS News
Credit card debt can be a significant financial burden, but it's also a common issue nationwide. Americans had a collective credit card debt of $1 trillion as of Q2 2023, according to the Federal Reserve Bank of New York's Household Debt and Credit Report. And, with interest rates as high as they are currently, this figure is likely to continue to grow.
In turn, there are a lot of people who could benefit from paying off what they owe on their credit cards. But that can be harder than it seems, especially right now. For starters, many people are strapped for cash since inflation has caused the price of nearly all consumer goods to skyrocket. The interest on credit card debt can also compound quickly, further adding to what's owed.
And you may be one of the people who could use a little help with your credit card debt. After all, in this economy, it can be pretty easy to rack up $10,000 (or more) when using credit cards. The good news is, though, that with the right strategies, you can take control of your financial future and eliminate what you owe.
Start exploring your debt relief options here.
7 ways to pay off $10,000 in credit card debt
There are a few different options you have when you want to pay off $10,000 in credit card debt, including:
Opt for debt relief
One powerful approach to managing and reducing your credit card debt is with the help of debt relief companies. These companies specialize in helping you regain control of your finances and eliminate debt. And, when it comes to debt relief, there are two primary strategies you can consider:
- Debt consolidation services: Debt relief companies can facilitate debt consolidation, a method that combines multiple high-interest credit card balances into a single, more manageable loan. This process often includes negotiating with your creditors for more favorable terms and lower interest rates. The goal is to simplify your repayment plan and reduce the overall cost of your debt.
- Debt negotiation and settlement: Another key aspect of debt relief is debt negotiation and settlement. Debt relief companies can engage directly with your creditors on your behalf to reach agreements that allow you to settle your debts for less than the total amount owed. While this approach can impact your credit score, it can provide immediate relief for those facing financial hardship.
Debt relief companies have the expertise to guide you through these processes, ensuring that you make informed decisions that align with your financial goals and circ*mstances. Before choosing a debt relief company, though, it's crucial to research and select a reputable organization that is accredited and transparent in its practices.
Learn more about how debt relief could help you here.
Use the snowball or avalanche method
Two popular debt repayment strategies that can be used to pay off $10,000 in credit card debt are the snowball and avalanche methods. Both involve prioritizing your credit card debts, but they approach it differently:
- Snowball method: With this method, you focus on paying off the smallest debt first while making minimum payments on the others. As each debt is paid off, you move on to the next smallest one. The psychological boost from eliminating individual debts can motivate you to stay on track.
- Avalanche method: The avalanche method prioritizes paying off the debt with the highest interest rate first. By doing this, you'll minimize the overall interest paid in the long run. Continue paying the minimum on your other debts and work your way down the list.
Find ways to increase your income
If you're serious about paying off your credit card debt, consider finding ways to increase your income. This can include taking on a part-time job, freelancing or even selling items you no longer need. The extra income can be applied directly to your debt, accelerating the payoff process.
Cut unnecessary expenses
Take a close look at your monthly expenses and identify areas where you can cut back. This might involve reducing dining out, canceling unused subscriptions or finding more cost-effective alternatives for your everyday needs. Redirect the money saved towards your credit card debt.
Seek credit counseling
Credit counseling services can provide you with guidance and assistance in managing your debt. Certified credit counselors can help you create a budget, negotiate with creditors and establish a debt management plan to pay off your credit card balances.
Use financial windfalls
If you come into extra money through tax refunds, work bonuses or gifts, consider using this windfall to pay down your credit card debt. Applying a lump sum payment can significantly reduce the balance and the interest you'll pay over time.
The bottom line
Paying off $10,000 in credit card debt may take time and discipline, but it's achievable with a well-structured plan. While debt relief is a valuable option, it may also help to consider other strategies such as debt prioritization, income boosts and expense reductions. Ultimately, the key to success when paying off your card debt is consistency and commitment to financial health. By following these strategies, you can regain control of your finances and secure a debt-free future.
Angelica Leicht
Angelica Leicht is senior editor for CBS' Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
