How to Pay Off $20,000 in Credit Card Debt

If you have $20,000 or more in credit card debt there are a few different options you can use to pay it off. The options and paths you decide to choose will likely depend on the type of person you are. There are DIY options for those that like to take their destiny into their own hands and there are paid options for those that would rather leave it to experienced professionals. All options could have potentially great outcomes but it all depends on the route you choose and which goals are most important to you.

Loan Option

If your goal is to borrow more money you can always go the route of taking out a personal loan or a consolidation loan in order to pay off your credit cards and make one monthly payment. This option tends to be the most expensive and the most difficult to qualify for however it can definitely help you make progress and pay down your debt quicker depending on your credit history. The loan option can help you better manage your finances with one monthly payment and interest savings. With this option you need to qualify for a $20,000 loan in order to pay off and replace your credit card debt with the loan debt.

Debt Settlement Option

With a debt settlement option, consumers will enroll into a debt relief program where debt negotiators will work on their behalf in order to save them money off their principal balance. They won’t be making monthly minimum payments as they would normally and will instead have one monthly payment with the debt relief company. Paying off $20,000 is a lot simpler with this option since you will have one pre-determined monthly payment provided by the debt relief company (the exact payment amount depends on how aggressively you’d like to pay it off). The heavy lifting will be done mostly by the company you choose and you will just have to make a monthly payment in order to successfully complete the program.

DIY Option

The two most popular DIY options are the debt snowball method and the debt avalanche method. Each option has its benefits and drawback so it helps understanding which method is preferred for which scenario. The debt snowball method is usually preferred by consumers that have so many accounts that it’s become difficult to manage them all. The snowball method focuses on indiscriminately paying down the lowest balance account first and eliminating your accounts one by one from the smallest balance to the highest balance. The avalanche focuses on paying down the highest interest rate account first no matter the size of the balance. Both options are effective at eliminating debt.

If you’re carrying $20,000 in credit card debt, prioritizing paying down debt is a great thing, whatever ever option you end up choosing. Taking action is always better than sitting idly by and making minimum payments or hoping for a solution to fall into your lap. Even if you’re initially unsuccessful, doing something will always be better than doing nothing.