5 Easy Steps to Pay Off Credit Card Debt Over $10,000

The more credit card debt you have, the harder it can be to pay off due to compounding interest charges and minimum monthly payments.

Fortunately, there are debt relief solutions for most forms of consumer debt, including credit cards. Whether you owe $10,000 or $25,000 in credit card debt, following these strategies will help you pay it off.

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Key points

  • Don’t panic: $10K in credit card debt isn’t much above the household average of between $5,525 and $8,701.
  • Debt consolidation will be a good option if you have a good credit score
  • If debt consolidation won’t work for you, talk with a debt resolution service
  • There are some DIY options to try if you want to try to tackle debt on your own

1. Set a budget (and stick to it)

If you’re dealing with high amounts of credit card debt, you should first create a budget.

To do this, add up all your monthly expenses — fixed and variable. Then, subtract that number from your total monthly income. Use your net income (take-home pay) for a more accurate idea of how much you’ll have left over each month.

Common expenses include utilities, rent payments and groceries. Be sure to include any other debts with monthly minimum payments, too, such as:

  • Other credit cards
  • Mortgage
  • Home equity loans
  • Student loans
  • Personal loans
  • Car Loans
  • Medical bills
  • Loans from family members or friends

Once you know how much you’re spending vs. how much you’re making, you can figure out if there’s any wiggle room. Depending on the situation, it may be possible to cut back on certain expenses – like dining out or entertainment.

If your expenses surpass your earned income, it may be time to seek additional help.

2. Consolidate your debts

Debt consolidation involves combining several debts into one, usually with a lower interest rate and a singular monthly payment. It can be done with a debt consolidation loan or a balance transfer credit card.

You could still have a good credit score even if you owe $10,000 in credit card debt. The better your score, the better the options for debt consolidation.

Balance transfer credit card

A balance transfer credit card lets you move the balance from one credit card to another. These cards usually require good credit. Some come with a 0% APR introductory offer that lasts between 12 and 21 months.

No interest charges accrue during this time, meaning any payments will go straight to the principal balance. Balance transfers usually cost 3% to 5% of the transferred amount.

Transfer as much high-interest credit card debt onto a balance transfer card as possible and try to pay it off before the promotional period ends. If the credit limit on the new card is lower than your total debt, pay off any high-interest debts first while making the minimum payment on the new card. Once the other debts are gone, pay off the balance transfer card.

Pro tip: Most credit card companies won’t let you transfer debt from one of their cards to another. This means that when you apply for a balance transfer card, it must be from another issuer.

Use a debt payoff calculator to determine how much the new card could save you in interest charges. The calculator can also show you how much you’ll need to pay each month to pay off the balance before the introductory rate expires.

Some balance transfer cards have a higher interest rate after the introductory period ends. If you can’t pay off the balance in time, consider applying for a new card and repeating the process beforehand.

Debt consolidation loan

There are many types of debt consolidation loans, but they can all be used for the same purpose: To combine multiple debts into one.

Pro tip: There are even some loans for borrowers with poor credit. These may have higher interest rates. However, they can still be easier to manage monthly than several accounts.

Debt consolidation loans usually require stable income and a low debt-to-income ratio. A good credit score could lower the interest rate than most credit cards.

There are even debt consolidation loans for bad credit borrowers, married couples and healthcare workers.

Peer-to-peer loan

Peer-to-peer or social lending is done through online platforms that match borrowers with individual investors. This form of lending cuts out the middleman (ex. bank or credit union), so investors can set their terms and interest rates. The credit and other lending requirements are usually more lenient than you’d find with traditional lenders.

Lending Club, Upstart and Prosper are good platforms for peer-to-peer lending.

3. Talk to a professional

If you aren’t sure how to get started, set up a free consultation with a professional. Debt settlement companies and credit counseling agencies all offer free initial consultations.

Pro tip: Some companies (like DebtHammer) offer multiple services and will assess your financial situation and offer advice on how to proceed. They will tell you straight up whether debt consolidation will work for you or if you need a debt settlement program.

Debt settlement

A professional debt settlement company will work with your creditors to settle your debts for an amount lower than your total debt. If your credit score has already taken a hit and you won’t qualify for a debt consolidation loan, debt settlement could be the way to go.

The average debt settlement client pays about 80% of the total amount they owe after paying the debt settlement company’s fees. That makes it a quick and efficient way to get back on track.

READ MORE: How to get your debt under control now

Credit counseling

Most credit counseling agencies are nonprofit, meaning they are free or cost only a small fee. They employ certified counselors trained to help you get a better handle on your finances. Usually, they can help with things like budgeting, money management and credit building. They can also offer a free initial consultation to review your finances and help create a plan.

Many also offer a Debt Management Plan (DMP), which can be used to tackle credit card debt — these plans usually last 3 to 5 years.

Once enrolled in a DMP, a credit counselor will help you set up a repayment plan with your creditors. Each month, you’ll deposit a set amount into a secured account that the agency will use to start paying off the debt.

DMPs typically come with an initial enrollment fee of around $30 to $50. They also often have a monthly account maintenance fee that ranges from $20 to $80.

Credit counseling on its own won’t reduce the amount of debt owed. However, the agency may be able to get your creditors to waive late fees or lower monthly payments. This can be helpful if you’re trying to catch up on payments or are on a tight budget.

Looking for a place to find a credit counseling agency in your area? Check with the Financial Counseling Association of America.

READ MORE: Debt settlement vs. debt management

4. Pick a payment strategy

Many strategies help pay off high amounts of credit card debt. Here are two of the most common — and effective — ones:

  • Debt avalanche: This method starts by paying off the debt with the highest interest rate first while making the minimum payments on all other debts, regardless of balance. Once the highest-interest debt is repaid, move on to the next account and so on. As each account reaches a zero balance, you’ll have a little extra money to put towards the next one.
  • Debt snowball: This method focuses on paying off the debt with the smallest balance first. In the meantime, pay the minimums on all other accounts. Once the smallest balance is paid off, move on to the next smallest account
  • Pay more than the minimum: This isn’t as systematic as the other two options, but if you pay more than the minimum monthly payment on each bill, you’ll get out of debt faster. However, this will only be effective if you stop using your credit cards.

READ MORE: Debt avalanche vs. debt snowball — which is better?

All three strategies have their pros and cons.

The debt snowball method, for example, can feel more rewarding as you quickly pay off each small debt. However, the interest charges can still be added to the other accounts, increasing overall fees.

The debt avalanche method, meanwhile, can save you hundreds or thousands of dollars in interest charges. However, it can take longer to start seeing the results of your efforts.

And paying more than the minimum each month won’t make much difference if you keep charging items on your credit cards and your debt continues to mount.

Before choosing any strategy, write down the balance you owe on each credit card account. Include the account’s interest rate, too.

5. Negotiate with your credit card companies

Creditors want to get paid, so see if they can negotiate. Some will agree to reduce your interest rate or temporarily waive late fees. They may even agree to write off some of the debt if you pay the rest in a lump sum.

Pro tip: If the bills are piling up, don’t wait or try to ignore them. Contact your credit card issuers as soon as possible and ask about your options. Some offer hardship programs to those suffering from a legitimate financial situation, such as unexpected unemployment or medical hardship.

Interested in negotiating your credit card debt? Use this calculator to see how much hiring a professional debt negotiator can save you.

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DIY debt settlement

Debt settlement involves taking debt and getting it reduced to a lower amount. There are two ways to do it: DIY and through a company. Both options are risky, but DIY debt settlement could save you a lot of agency fees.

To get started, figure out how much you owe and to whom. Check with your creditors to see what options for debt relief or settlement they offer.

Then, create a fund and start adding to it. Even if your creditors agree to settle the debt, they’ll typically still require a certain amount — usually 20% to 50% of the original balance. Having this in advance could increase your odds of successfully settling the debt.

Pro tip: This will only work for skilled negotiators, and you should plan to devote several hours a week to to working on this project.

Once you’ve saved up enough, contact your creditors and make them an offer based on what you can afford. Be prepared with the reason — or reasons — why you need to settle the debt. The creditor may accept, provide a counter-offer or refuse.

If an agreement is made, get the new terms in writing to avoid any confusion or issues. Your creditor may also require you to pay in a lump sum or over a set period.

Credit card debt over $10,000 isn’t much over average

Owing $10,000 in credit card debt might seem like a lot, but it’s not that unusual. The average American household owes between $5,525 and $8,701 in credit cards.

People end up with high amounts of credit card debt for various reasons. Credit cards’ convenience makes it easy to use funds you don’t necessarily have. For another, many people make only the minimum monthly payments, which only cover interest charges.

People often use credit cards to pay for financial emergencies or sudden expenses, like medical or utility bills. These transactions can quickly add up. And, when you add high interest rates, what started as a manageable number can quickly become a problem.

With a little discipline, these strategies will help you reset your finances and end the debt cycle for good.

Other debt relief options

If you’re looking for other ways to get help dealing with credit card debt over $10,000, here are some options:

  • Borrow money from family or friends. Asking for help can be tough, but it’s also usually better than taking out a predatory payday loan or maxing out credit cards. It can also help you make real progress on existing debt.
  • Take out a home equity loan or home equity line of credit (HELOC). If you’re a homeowner, consider using the equity in it to pay off credit card debt with one of these low-interest options.
  • Use a 401(k) loan. If you have a 401(k), you may be able to withdraw from it early to pay off high-interest debts. Just make sure you pay it back quickly to avoid any hefty penalties or setting back your retirement investment.
  • Bankruptcy: If you’re out of options and a debt settlement company doesn’t think your creditors will work with you, bankruptcy will give you a fresh start. It’s complicated, though, and has serious ramifications. Consult a lawyer if you’re seriously considering this as an option.

Interested in the pros and cons of taking a loan from your 401(k)? Check out this video:

The bottom line

If you need help with credit card debt over $10,000, or any amount, there are strategies to pay it back. This includes debt consolidation, balance transfer credit cards and credit counseling. Weigh your options and choose a strategy that best works for you and your budget.

DebtHammer helps get you out of debt. Get your free savings estimate here.


What are the best debt consolidation loans for married couples?

Some lenders and platforms, such as LightStream, SoFi and FreedomPlus offer debt consolidation loans for married couples. Getting a loan as a married couple can help you pay off debt accrued either during or before the marriage. It can also increase your approval odds.

Which states will send you to jail for unpaid debts?

You will not go to jail for not paying consumer debts – that is, most loans, medical bills and credit cards. However, you could be found in contempt of court if you receive a court summons and don’t show up. If this happens, you could be arrested. You could also go to jail for not paying child support or another court-ordered payment.

There are 26 states in which you could go to jail for contempt of court. These are Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Washington and Wisconsin.

What are some ways to build credit without a credit card?

There are several ways to build or repair credit without a credit card. You could get a credit-builder loan or auto loan, for example. Or you could sign up for a credit-reporting tool like Experian Boost. Alternatively, you could become an authorized user on someone else’s account.

Should I file for bankruptcy for $10,000 in credit card debt?

Filing for bankruptcy should generally be considered a last resort. Before going this route, exhaust all other options. If nothing is working, consult with a bankruptcy attorney. They can advise you on if it’s the next best step for you. 

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