Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (2024)

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Credit card debt is always difficult to deal with, but as it gets larger, paying it back gets a whole lot harder. If your total credit card balances are $25,000 or higher, they'll go up by hundreds of dollars every month because of interest. And it could cost you $500 or more just to make minimum payments.

Most consumers will take several years to get out of credit card debt and end up paying more in interest than they originally charged. Although it does take time to pay off this much debt, following a good debt repayment strategy will speed up the process and help you save on interest.

Jump To

  • Negotiate credit card interest rates
  • Cost effective ways to pay off credit card debt
  • Credit cards for balance transfers
  • Becoming debt free from credit cards

Start by negotiating your credit card interest rates

Many consumers don't realize you can do this, but it is possible to negotiate a lower interest rate with your credit card companies. All you need to do is call the number on the back of your card and ask. It will help your cause if you've always paid on time.

Even though you may not be successful with every card you have, any deal you get from a card issuer could save you hundreds or even thousands of dollars in credit card interest as you pay off your balances.

Pay off credit card debt with balance transfers

The most cost-effective way to pay off credit card debt is with balance transfers. Here are the steps to follow:

  1. Apply for a balance transfer credit card.
  2. Transfer as many credit card balances as you can to the balance transfer card. Start with the ones that have the highest interest rates.
  3. Pay as much as you can toward your balance transfer card every month until it's paid off.
  4. Apply for another balance transfer card and repeat the process.

Now, let's look at how this works in more detail.

First, you need a balance transfer card. This type of credit card offers a 0% intro APR on balance transfers. That means you can pay zero interest for the entire introductory period. These cards almost always charge a balance transfer fee, but it's a small price to pay considering how much you'll save on interest.

Check out the best balance transfer cards to find one that works for you. There are two things to look for here:

  • The length of the 0% intro APR: A longer introductory period gives you more time to pay off balances you transfer.
  • The credit card issuer: Most card issuers don't let you transfer balances from one of their cards to another. For example, if you have balances on Chase credit cards, don't choose a balance transfer card from Chase, because you won't be able to bring over those balances.

You probably won't be able to transfer all your credit card debt onto your balance transfer card. The amount you transfer, including fees, can't exceed the card's credit limit, and some cards also have their own separate balance transfer limits. That's why you'll start by transferring your highest-interest credit card debt.

Next, you need to pay off your balance transfer card as quickly as possible. Only make minimum payments on your other credit cards, and put every cent you can toward your balance transfer card.

Once you've paid off the balance transfer card in full, you can apply for a new one.

By following this method, you'll continually refinance your highest-interest credit card balances at a 0% intro APR. This will maximize how much you save and how quickly you're able to pay off your debt.

Our expert pick for a balance transfer card

Ratings Methodology

Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (3) 2024 Award Winner

Wells Fargo Reflect® Card

Great for: Long 0% intro APR

Apply Now for Wells Fargo Reflect® Card

OnWells Fargo'sSecure Website.

Rates & Fees Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (4)

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Credit Score:Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Recommended Credit Score required for this offer is: Good/Excellent (670-850)

Poor

Fair

Good

Excellent

300-579

580-669

670-739

740-850

Apply Now for Wells Fargo Reflect® Card

OnWells Fargo'sSecure Website.

Rates & Fees Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (56)

Credit ScoreFalling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.

Good/Excellent (670-850)

Intro APR0% intro APR for 21 months from account opening on purchases and qualifying balance transfers

Purchases: 0% intro APR, 21 months from account opening

Balance Transfers: 0% intro APR, 21 months from account opening on qualifying balance transfers

Regular APR

18.24%, 24.74%, or 29.99% Variable APR

Rewards

N/A

Annual FeeN/A

$0

  • This no-frills card is a solid choice if your priority is to avoid credit card interest for as long as possible. It offers an incredible 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. The balance transfer fee (5%, min: $5) is higher than some cards — but if you want an equally long intro APR on purchases, then this card is hard to beat.

    • Long 0% intro APR offer
    • No annual fee
    • Cellphone protection
    • Free FICO® Score
    • Balance transfer fee
    • Foreign transaction fee
    • Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
    • 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 18.24%, 24.74%, or 29.99% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min $5.
    • $0 Annual Fee.
    • Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
    • Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account creditwhenyou shop, dine, or enjoy an experience simply by usingan eligibleWells Fargo credit card.

What if you can't qualify for a balance transfer card?

Although balance transfers work well for credit card debt, they aren't right for everyone. Like most of the best credit cards, the top balance transfer cards are typically only available for consumers with good to excellent credit. If your credit score isn't at least near 670, you could have trouble qualifying.

Debt consolidation loans are another option, and many lenders offer loans for borrowers who don't have high credit. You could get a loan large enough to cover all or a portion of your debt and use that loan to pay off your credit cards. Then, you'd pay back your loan in fixed installments and ideally at a lower interest rate than you had before.

You'll need to find a lender with minimum requirements you can meet, but there are plenty of personal loan lenders available to fit many people's income and credit score. If you don't have a high credit score, here are a few lenders that focus on borrowers with poor to fair credit:

  • Upstart
  • Avant
  • Lending Point

Going from deep in debt to debt free

Make no mistake about it -- there's no magic bullet to wipe out over $25,000 in credit card debt. Even with balance transfer cards, you'll need to be diligent about paying as much as you can every month, and the process could still take years.

But this method does help you in a few key ways:

  • It dramatically cuts down how much interest you'll need to pay.
  • It gives you a clear target to pay off each time you get a balance transfer card.
  • It allows you to chip away at your debt and see the progress you're making as you pay off one balance transfer card after another.

If you can stick with it, this is the smartest way to pay off a large amount of credit card debt.

Still have questions?

Some other questions we've answered:

  • What can I do to get out of my credit card debt?
  • How can I pay off my credit card fast?
  • How much debt is too much debt?

Our Credit Cards Expert

Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (57)

By:Lyle Daly

Writer

Lyle Daly is a personal finance writer who specializes in credit cards, travel rewards programs, and banking. He writes for The Ascent and The Motley Fool, and his work has appeared in USA Today and Yahoo! Finance. He was born in California but currently lives as a digital nomad with a home base in Colombia.

Have Over $25,000 in Credit Card Debt? Here's How to Pay It Off | The Motley Fool (2024)

FAQs

How to get out of $25,000 credit card debt? ›

To pay off $25,000 in credit card debt within 36 months, you will need to pay $905 per month, assuming an APR of 18%. You would incur $7,596 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

How long does it take to pay off a 25,000 credit card? ›

$25,000 at 20%: Your minimum payment would be $666.67 per month and it would take 437 months to pay off $25,000 at 20% interest.

How to get rid of $30k in credit card debt? ›

How to Get Rid of $30k in Credit Card Debt
  1. Make a list of all your credit card debts.
  2. Make a budget.
  3. Create a strategy to pay down debt.
  4. Pay more than your minimum payment whenever possible.
  5. Set goals and timeline for repayment.
  6. Consolidate your debt.
  7. Implement a debt management plan.
Aug 4, 2023

How long will it take to pay off $20,000 in credit card debt? ›

It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

What is the credit card forgiveness program? ›

Credit card debt forgiveness typically occurs as the result of a debt relief service known as debt settlement. With these services, debt relief experts negotiate with your creditors in an attempt to settle your debt for less than you owe.

Is $25,000 a high credit card limit? ›

Yes, $25,000 is a high credit card limit. Generally, a high credit card limit is considered to be $5,000 or more, and you will likely need good or excellent credit, along with a solid income, to get a limit of $25,000 or higher.

What is the 5 24 rule for credit cards? ›

The 5/24 rule, often referred to as the Chase 5/24 rule, is a credit card application guideline implemented by Chase Bank. It states that if you have opened five or more credit card accounts (from any bank) in the past 24 months, you are likely to be automatically declined for certain Chase credit cards.

How to pay off 25k fast? ›

Here are the steps to follow:
  1. Apply for a balance transfer credit card.
  2. Transfer as many credit card balances as you can to the new balance transfer card. ...
  3. Pay as much as you can toward your balance transfer card every month until it's paid off.
  4. Apply for another balance transfer card and repeat the process.
4 days ago

How to pay off credit card debt when you have no money? ›

  1. Using a balance transfer credit card. ...
  2. Consolidating debt with a personal loan. ...
  3. Borrowing money from family or friends. ...
  4. Paying off high-interest debt first. ...
  5. Paying off the smallest balance first. ...
  6. Bottom line.

Will credit card companies forgive debt? ›

The only way credit card companies are likely to forgive the full amount of your balances is if you file bankruptcy. However, there are other ways to get out of debt in a reasonable amount of time. For example, you may be able to have a portion of your credit card balances forgiven with a debt settlement program.

What is the quickest way to pay off credit card debt? ›

Strategies to help pay off credit card debt fast
  1. Review and revise your budget. ...
  2. Make more than the minimum payment each month. ...
  3. Target one debt at a time. ...
  4. Consolidate credit card debt. ...
  5. Contact your credit card provider.

What amount is considered bad credit card debt? ›

Anything over 30% credit utilization will decrease your credit score. So, you can use this as a measure of when you have too much debt. Consolidated Credit offers a free credit card debt worksheet that makes it easy to total up your current balances and total credit limit.

How to pay off $20k in debt fast? ›

Use a debt consolidation loan

With a debt consolidation loan, you borrow money from a lender and roll all of those debts into one loan with a single interest rate. This allows you to make one monthly payment rather than paying multiple creditors.

How to wipe credit card debt? ›

Filing for Chapter 7 bankruptcy could discharge (forgive) all of your credit card debt. However, bankruptcy should only be considered as a last resort option due to the lasting damage it will cause to your credit. Bankruptcy will remain on your credit for up to 10 years after the filing date.

How to get out of debt when you are broke? ›

How to get out of debt when you have no money
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Dec 5, 2023

How can I pay off $30 K debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How to recover from massive credit card debt? ›

Here are several techniques for paying off credit card debt the smart way.
  1. Try the avalanche method. ...
  2. Test the snowball method. ...
  3. Consider a balance transfer credit card. ...
  4. Get your spending under control. ...
  5. Grow your emergency fund. ...
  6. Switch to cash. ...
  7. Explore debt consolidation loans.
Mar 20, 2024

What is the National debt relief Hardship Program? ›

Founded in 2008, National Debt Relief is a debt settlement company that negotiates the reduction of unsecured debt. If you have over $7,500 in unsecured debt, NDR may be able to cut that amount in half.

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