How to pay off $30,000 in credit card debt

Paying off high credit card debt is possible, but it requires planning and solid strategies. (iStock)

Debt isn’t necessarily a bad thing. It can actually be helpful in some situations, especially if you use it to build wealth — think mortgages and student loans.

Having high credit card debt, though, can undermine your financial health long term.

If you have $30,000 in credit card debt — or even more — you can pay it off with careful planning, some sacrifice, and commitment. Here are some options for how to pay off a large amount of credit card debt.

How to pay off $30,000 in credit card debt

Many people would likely say $30,000 is a considerable amount of money. Paying off that much debt may feel overwhelming, but it is possible. With careful planning and calculated actions, you can slowly work toward paying off your debt. Follow these steps to get started on your debt-payoff journey.

Step 1: Take stock of your credit card debt

Write down all your credit card balances from largest to smallest and other pertinent information like due dates, minimum payment requirements, and interest rates. Create a spreadsheet or keep a notebook specifically for your debt payoff so that the information is organized and doesn’t get lost in the shuffle. Assessing your debt gives you the big picture, which you’ll break down into smaller chunks later on.

Step 2: Budget and strategize

Now that you know how much of your monthly income is going toward your debt, you can make a plan for paying it off. You’ll need to create a budget, if you don’t already have one, that allows you to put as much of your income as possible toward getting out of debt. If you already have a budget, look for areas where you can trim expenses — then put that extra toward your debt.

Step 3: Create goals and a timeline

Do yourself a favor and set a realistic timeline for paying off your debt. Debt-payoff plans tend to work better when you set specific and concrete goals you want to — and can — achieve. If you can’t pay off your debt in the next year, don’t make your timeline 12 months. Do the math to see what a more realistic timeline is, write it down somewhere visible, and get started paying off your debt.

Step 4: Implement your debt management plan

Now that you’ve assessed your debt and your budget, and created a plan and a timeline, get the ball rolling on paying off your credit card debt. It’s a good idea to set up automatic payments for the minimum amounts on all your cards. Then, make manual payments to put extra money toward the accounts you plan to pay off first.

Step 5: Make adjustments as needed

As you pay off your credit card debt debt, take time to reassess your plan to make sure it's effective. Adjust your plan as necessary, but don’t give up. A setback isn’t a reason to quit, it just means you need to make adjustments. Find a friend or family member to keep you accountable as an additional way to ensure you’re making progress.

3 types of credit tools to help you pay off credit card debt

Making payments until your debt is gone isn’t the only way to pay off credit card debt. Existing financial tools and loan options can save you money and potentially speed up the payoff process. Here are some relief options for making credit card debt less expensive.

Personal loan for credit card debt consolidation

One way to tackle credit card debt is to take out a personal loan, which allows you to consolidate all your credit card debt into one manageable monthly payment. Depending on your credit, you may qualify for a lower interest rate for a debt consolidation loan than you receive with your credit cards.

But keep in mind that it might be difficult to qualify for a personal loan, or to qualify for a good rate, if your credit isn’t up to par. You may need the help of a cosigner to secure a loan, which puts someone else on the hook financially if you can’t make your loan payments.

You’ll want to comparison shop to find the best personal loan rates for your needs. Credible makes it easy to compare personal loan rates from multiple lenders.

Home equity products

If you own a home, you can use the equity you’ve built up to get a home equity loan, cash-out refinance, or home equity line of credit, or HELOC. The equity you pull out of your home can be used for any purpose, including paying off high-interest credit cards.

Qualifying for a cash-out refinance, home equity loan, or HELOC may be easier than a traditional loan because you’re securing it with your home as collateral. The big risk is that if you default on the loan, your lender can seize your house and sell it to pay off the loan debt. Think twice before you tap into your home’s equity to pay off credit card debt, and only take the step if you’re 100% confident that you’ll be able to cover your new mortgage payment.

0% APR card

Another option is to apply for a balance transfer card that features a lengthy introductory 0% APR offer for a set amount of time. The best balance transfer cards offer intro APR periods as long as 18 or 24 months — that gives you up to two years to pay off your credit card debt without paying interest.

While balance transfer cards are a great tool, they aren’t perfect. Most balance transfer cards charge a fee — typically 3% to 5% of the balance — to transfer over debt from other cards. You’ll have to do the math to see if paying balance transfer credit card fees will cost less than paying interest on your current cards.

You can also lose your introductory offer if you make a late payment during the intro period. And, most importantly, if you fail to pay off the entire balance by the end of the introductory period, you could face some hefty interest charges.

You can compare 0% credit cards through Credible.

7 tactics to pay off credit card debt

Your path to paying off credit card debt may look different than someone else's, and that’s OK. Several approaches can help you successfully pay down your debt. It often takes using multiple strategies at different steps along the way to be successful.

Streamline your budget

One of the easiest ways to free up more money to pay off debt is to cut your expenses. Take a look at your monthly spending to see where you can cut back. Budgeting apps make it easy to track spending and find holes in your budget. Nobody likes to cut out budget items they love, like eating out or entertainment, but doing so can help make a massive dent in your debt, even for a short time.

Increase your income

Unfortunately, you can only cut your expenses so far, so your other option is to increase your income. You can do this by picking up a part-time job, starting a side hustle, or asking for a raise at your current job. If you can increase your income, apply all the extra income toward paying off your debt. And be sure to avoid spending creep — don’t increase your spending just because your income increased.

Set up automated payments

Missing a payment can be costly, from late fees to losing a low promotional interest rate. Setting up automatic payments is an easy way to make sure your monthly credit card bills get paid every month on time. Most credit card companies allow you to automate your payments online or through their mobile app. Automated payments could also help you improve your credit score, since payment history is a major factor in determining credit scores.

Pay extra every month

Just because your credit card bill has one specific due date doesn’t mean you can’t make extra payments throughout the month. Sometimes the best way to pay down debt is to pay your credit card bill any time you get new money in your bank account. Plus, it can help you pay less interest overall.

Consider the avalanche method

One of the best methods for paying down debt is to use the debt avalanche method. On top of your monthly payment, put extra money each month toward the card with the highest interest rate first, while only making minimum payments on your other cards. Once you pay off the highest-balance card, move to the card with the next-highest interest rate until they’re all paid off. The avalanche method minimizes the amount of interest you’ll end up paying, saving you money in the long run.

Or, try the snowball method

Another popular method for paying off debt is the debt snowball method. With the snowball method, instead of starting with the card with the highest interest rate, you start with the card with the lowest balance. Put extra money each month toward that card, on top of your monthly payment, until you pay it off. Then move to the card with the next highest balance and do the same thing. The idea behind the snowball method is that small wins will help motivate you to keep going. Each time you pay off a card, it’s a small win that keeps you in tune with your financial goals.

Get help from a credit counselor

If you’re having trouble sticking to your debt-payoff plan or coming up with a plan that works for you, your best bet may be to seek out a credit counselor. Most reputable credit counselors are non-profit and can help you create a plan to pay off debt and provide other helpful financial advice. Credit counselors can also help you get to the root of your credit issues so you don’t fall back into a hole after paying off your debt.

Why credit card debt is so harmful

Credit cards often get a bad rap, but they can be helpful tools when borrowers use them correctly. Using a credit card responsibly helps you build a positive credit history, which comes in handy when making significant credit applications like buying a house or a car.

Credit card debt is the result of not paying your balance in full each month. Unfortunately, when you carry a balance, interest accrues on the card’s balance, making your bill even higher.

To really understand how costly credit card debt can be, it pays to look at annual percentage rates, or APRs. The APR represents the total cost of borrowing money, including the interest rate and any fees that apply.

Credit card APRs tend to be much higher than other types of credit. Let’s say your credit card has an APR of 18.35%, and you plan to make equal payments to pay off $30,000 of debt in 48 months. You’d end up paying $12,564 in interest charges during that time, or $42,564 total for the $30,000 debt.

Now, look at a personal loan for the same amount, paid off with equal payments over that same period with a 10.45% APR. You’d only pay $6,834 in interest charges for a total debt balance of $36,834 — $5,730 less than you would with the credit card. Any kind of debt can be harmful, but credit card debt can be especially damaging because of the higher APRs.

4 tips to keep in mind while paying off $30,000 in credit card debt

Prioritizing credit card debt is a wise thing to do — it can help you create a better financial future. But it’s important to not let your efforts derail your other financial goals. There are also some things that you should avoid doing while paying down your debt. And there are some things you need to keep doing. 

  • Don’t create new credit card debt. Using your credit cards while trying to pay them off is counterintuitive. Use this time to sharpen your spending habits so you’ll be ready to use your cards to your advantage once you pay them off.
  • Do keep saving for the future. Paying down debt doesn’t mean pausing retirement savings. Continue to make contributions to your retirement accounts, such as a company-sponsored 401(k) or an IRA, while you pay off credit cards.
  • Leave your emergency fund alone. Your emergency fund is there for unexpected emergencies that pop up. Tapping into your emergency fund to pay off credit cards leaves you vulnerable and can cause you to spend more on your cards when an emergency arises.
  • Preserve your home equity. Think of the equity in your home like a CD or high-yield savings account — the longer you leave it where it is, the more it’s worth to you.

However you decide to pay off your credit card debt, you can find insight into your finances and compare lender rates at Credible.