The knowledge that you’re not the only one who is wondering how to pay off $15,000 in credit card debt should give you some peace of mind. More than 40% of U. S. households carry over credit card debt from one month to the next and the average balance is $7,938.
Financial experts predict that even though Americans paid off $138 billion in credit card debt in the first two quarters of 2020 due to the COVID-19 pandemic, card debt will rise again once restaurants and other events reopen. Whether your credit card debt is $15,000, $7,938 or something else entirely, the problem is that you have a sizable amount that is difficult to pay off. And for every month that balance doesn’t get lower, it costs you more money.
Even if you’re “average,” it’s simple for the balance on multiple credit cards in your household to reach $15,000 or more in debt. How to pay off $15,000 in credit card debt may seem impossible. The good news is, it’s not. There are many ways to chip away. The seven tried-and-true methods listed below range from professional help from a debt management program (DMP) to self-help options as basic as improved budgeting or a do-it-yourself payment plan. In the middle are debt consolidation loans, balance transfer cards, and if things are really desperate, debt settlement.
Making only the minimum payments each month is the hardest—or impossible—way to pay off $15,000 in credit card debt, or any amount of debt. A minimum payment of 3% of a month on a debt worth $15,000. This equates to 227% of months (almost 2019 years) of payments, beginning at $450 per month.
When the $15,000 is paid off, you will have also paid nearly the same amount in interest ($12,978 if you’re paying an average interest rate of 14). 96%) as you did in principal. And that’s if you don’t use any other credit cards for those 19 years.
Any one of the seven options you select will need you to put in a lot of effort and maintain focus on your long-term objective of paying off your credit card debt.
15,000 bucks in debt? Yeah, that’s a hefty sum, no doubt. But hey, don’t sweat it. We’ve all been there, and guess what? We got out of it. So, let’s talk about how you can too.
First things first, let’s get real. $15,000 is a big sum of money, especially when it’s looming large over your head like a threatening cloud. Interest rates that keep rising and make it seem impossible to break can make it seem like a never-ending cycle. But here’s the thing: it’s not impossible.
There are ways out of this mess, and we’re here to show you how. We’ve compiled the best tips and tricks from the experts at NerdWallet and InCharge Debt Solutions, so you can get a handle on your debt and start living a financially free life
So, let’s dive into the nitty-gritty.
Understanding Your Debt: The First Step
Before you can tackle your debt, you need to understand it. You can begin creating a plan to pay off your debt once you have a clear picture of it, including the interest rate, minimum payment, and actual monthly principal paid.
Here are some questions to ask yourself:
- What are my interest rates?
- What are my minimum payments?
- How much am I actually paying towards the principal each month?
- What are my other debts?
- What is my income?
- What are my expenses?
You can begin creating a plan to pay off your debt once you have a clear understanding of it.
7 Ways to Conquer Your 15,000 Debt
There’s no one-size-fits-all solution to debt. but here are some of the most effective strategies:
1. Create a Budget:
This is the foundation of any debt-reduction plan. Track your income and expenses for a month to see where your money is going. Once you know where your money is going, you can start to make cuts and free up some cash to put towards your debt.
2. Debt Management Program:
A debt management program (DMP) can be a lifesaver if you’re feeling overwhelmed and unable to move forward. With a debt management plan (DMP), you can combine multiple monthly payments and often receive a reduced interest rate. This can greatly simplify the process of managing your debt and expedite its repayment.
3. DIY (Do It Yourself) Payment Plans:
If you’re a self-starter and prefer to take control of your finances, a DIY payment plan might be the way to go. There are two popular methods: the avalanche method and the snowball method.
4. Debt Consolidation Loan:
This is a traditional way to handle credit card debt, and for a good reason: if you qualify for a debt consolidation loan, you should be paying a lot less interest than you were on your credit cards.
5. Consider a Balance Transfer:
Another option is a credit card balance transfer, which if you qualify, can help you pay debt faster with a 0% or low annual percentage rate (APR).
6. Debt Settlement:
This is a last resort option, but it can be a way to get out of debt if you’re struggling to make payments. Debt settlement involves negotiating with your creditors to settle your debt for less than what you owe.
7. Lifestyle Changes:
Besides creating a budget, making some lifestyle changes can help you manage and pay off your credit card debt faster. This could include eating out less, getting a roommate, or even moving to a cheaper city.
Additional Resources:
- NerdWallet: https://www.nerdwallet.com/article/credit-cards/15000-credit-card-debt
- InCharge Debt Solutions: https://www.incharge.org/debt-relief/debt-management/pay-off-15000-in-credit-card-debt/
Remember, you’re not alone in this. There are millions of people who have been in your shoes, and they’ve all found a way out. With the right plan and a lot of determination, you can too.
So, take a deep breath, roll up your sleeves, and get ready to tackle your debt. You’ve got this!
Pay Your Debts When You Get Paid
When it’s payday, pay off your bills—especially the credit cards—and make sure you have enough cash in your bank account to cover your expenses until the following payday. In this manner, the bills are settled and you are prevented from using the money for other purposes.
Automatic withdrawals help tremendously with this. As many of your bills as you can, but especially your credit card bills, should have automatic withdrawals set up. Also, make sure you are paying enough so that you are paying extra, not just the minimum.
No, couponing today is not what your grandmother did when she clipped coupons out of newspapers while seated at the kitchen table with scissors. “Couponing” is a whole new world, but, like Grandma, you can still save a lot of money. That’s money you can apply toward your credit card debt.
Online coupon services come in many forms: SnipSnap, RetailMeNot, Groupon for dining, Ibotta for groceries, and more. You can find what you want and either get digital coupons or ones you can clip out by searching for “online coupons” on Google. There are also online services like Rakuten (it used to be called Ebates). Sign in and shop at your favorite stores through the website and get small amounts of cash back. It costs you nothing. Just be sure you’re shopping for things you need to buy.
Additionally, your neighborhood grocery store might have a rewards or loyalty program with an app that is loaded with coupons and discounts, such as a percentage off if you purchase store brands.
And sure, if you really want to, you can still clip coupons out of your local newspaper.
Lifestyle Changes to Pay Off Credit Card Debt
Regardless of the option you select, managing and paying off your credit card debt more quickly can be achieved by making wise financial decisions in addition to setting up a budget.
One crucial step in starting to manage credit card debt is creating a budget and making cost reductions to help meet it. Making some lifestyle changes is the next big step. And, like budgeting and cutting expenses, it can be tough to do, because it’s all up to you.
A change in lifestyle can take many forms, such as cutting back on eating out (which we already discussed), getting a roommate to help with the rent, giving up your car if you live somewhere with good public transportation, or even relocating to a less expensive state or city. Visit your neighborhood library to check out books and rent movies rather than making new purchases or paying for streaming services. Turn off the air conditioning or turn down the heat.
Everyone’s life is different, but look at things you do that cost money that you could do differently. Think outside of the box. Making lifestyle adjustments frequently requires stepping outside of your comfort zone, but once you establish new routines, you might find greater solace in the relief of gradually paying off that $15,000 credit card debt that never seems to go down.
There are some things that are good options for almost anyone:
Establish the benchmarks you wish to meet while you pay off your credit card debt, using your budget as a guide. Set financial goals. Create a graph or utilize a spreadsheet to monitor your advancement and watch the debt vanish.
Having a visual, keeping track and marking milestones help keep you focused on what your goal is. You know what the goal is – paying down that $15,000 credit card balance.
Also keep in mind that your goals should be realistic. Apply a SMART-goal strategy – make sure that they are Specific, Measurable, Achievable, Relevant and Timely.
$15,000 Income and $14,000 in Debt!
FAQ
How long will it take to pay off 15k debt?
Is 15k in debt a lot?
How to get out of $15,000 debt?
What is considered a lot in debt?
Is a $15,000 credit card balance a good thing?
It’s not at all uncommon for households to be swimming in more that twice as much credit card debt. But just because a $15,000 balance isn’t rare doesn’t mean it’s a good thing. Credit card debt is seriously expensive. Most credit cards charge between 15% and 29% interest, so paying down that debt should be a priority.
How much credit card debt is too much?
And really, at Consolidated Credit, we think any amount of debt is too much. But ideally you should never spend more than 10% of your take-home pay towards credit card debt. So, for example, if you take home $2,500 a month, you should never pay more than $250 a month towards your credit card bills.
How do I pay off 15K credit card debt?
This comes with a small monthly fee, but the reduced interest rate should more than make up the difference and, in 3-5 years, the $15,000 credit card debt will be gone. Pay off 15k in credit card debt using budgeting, debt management programs, payment plans, consolidation loans, balance transfer cards, or debt settlement.
How much credit card debt can you live by?
There isn’t a recommended maximum limit for credit card debt cardholders can live by—the key to maintaining a good credit score is keeping credit utilization below 30% and paying off balances on time. No single credit card is the best option for every family, every purchase or every budget.