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5 great ways to pay off $20,000 in credit card debt

There are ways to get out of $20,000 in credit card debt including debt relief programs and budget adjustments.  Getty Images

There's no question that credit card debt can be easy to get into. All you have to do is swipe your card for a purchase to pay. And, if you aren't careful, that debt can accrue quickly because credit cards generally have high interest rates, which can make it even more difficult to get out of debt, says certified financial planner Hanna Horvath. 

"Credit card debt has obviously become extremely expensive," Horvath says. "I think it will still be quite expensive to carry credit card debt."

But if you find yourself with a large amount of credit card debt – let's say $20,000 – there are some methods you can use to get out.

Find a debt relief program to help you deal with credit card debt today

5 ways to get pay off $20,000 in credit card debt

Here are some ways you can pay off $20,000 in credit card debt.

Use a debt relief company

If you want outside help dealing with a $20,000 credit card bill, a debt relief company might be a good idea. There are a few types of debt relief programs these companies offer, including:

  • Debt management program: If you use a debt management program, a credit counselor may help negotiate lower interest rates and roll all of your loans into one payment, which is made directly to the credit counseling agency.
  • Debt settlement: With debt settlement, the debt relief company negotiates with your creditors to help get you out of debt by reducing interest rates or forgiving a portion of your debt. With this option, you stop making payments to individual creditors and instead make payments to the debt settlement company, which holds the money in an account until it accrues enough cash to pay off your debts. This option could have negative implications for your credit score, so think carefully before you pursue it.

Take the time to look at different debt relief companies before you choose the one you want to work with. Each one may have different requirements, including a minimum amount of debt, and each will charge different fees. Make sure you find a service you are comfortable with that fits your needs.

Learn more about your debt relief options right now.

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. You may also get a better rate compared to your credit card APYs, saving you money in interest. A debt consolidation loan is especially useful if you are trying to pay off multiple credit cards. 

Use a payment strategy

If you want to pay off your $20,000 credit card debt without using an outside service, there are payment strategies you may be able to use.

The first is called the debt avalanche, which focuses on paying off the debt with the highest interest rate first. You make the minimum payment on all other credit card debts each month and put any extra funds toward the debt with the highest interest rate. 

After the debt with the highest rate is paid off, you focus on paying off the one with the next highest interest rate, and continue until all your debts have been paid off.

Another method is called the debt snowball, which focuses on paying off your smallest debt first. You make minimum payments on all of your debts other than the smallest one and put extra money toward the credit card with the least amount owed on it. Once your smallest debt is paid off, you move to the one with the next smallest debt, and continue until all of them have been paid off. 

Take on a side hustle

Many people have a side hustle in addition to their full-time job. If you have credit card debt, you could start a side hustle and put all of the money toward your debt. Some side hustles to consider include opening an Etsy shop, doing paid surveys, renting out a room in your home and getting a gig economy job, like dog walking or driving for a rideshare service. 

Take out a home equity loan

If you own your house, you can borrow against the equity you have built in your home. This works similarly to a debt consolidation loan, but home equity loans aren't specifically designed for getting out of debt. They can be used for a wide range of purposes, from home repairs to paying for emergencies. 

Be careful with this method, though. Your house is used as collateral on the loan, and if you can't repay what you owe, you could end up in foreclosure. 

"If you don't have some sort of backstop, taking out another loan to pay off your loans may not be your best bet," Horvath says.

Make budget cuts

Another way to pay off $20,000 in credit card debt is to spend less money and use the savings to pay off your debts. Some cuts to consider include entertainment, meals at restaurants and your daily trip to the coffee shop. It may not seem like much, but cutting even a few things from your budget could add up and help you get out of debt quickly. 

The bottom line

Getting out of $20,000 in credit card debt won't be easy but there are ways to do it. Whether you use a debt relief company, implement a payment strategy or make cuts to your budget, with a good plan and dedication you can get yourself out of debt and get your financial life back on track.

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