How To Pay Off $20,000 of Credit Card Debt

By Aaron Sarentino Reviewed by Nima Vahdat Updated Nov 30, 2023
How To Pay Off $20,000 of Credit Card Debt

Understanding your individual psychology and budget is key to successfully paying off credit card debt.

Are you struggling to pay off a large amount of credit card debt? If so, you are not alone. 

Experian suggests that the average credit card debt per American is $6,365. With some individuals having higher balances, it’s not uncommon for people to have $20,000 or more in credit card debt. However, there are ways to tackle this debt and pay it off for good.


  • Understand the strategy that would work best for your individual needs.
  • Selling unused and unprofitable assets can help you pay off credit card debt.
  • Debt consolidation serves as a practical option for reducing interest rates.
  • Increasing income while reducing expenses can help you pay more than the minimum on your credit card debt, resulting in the ability to pay off $20,000 in credit card faster.

Know Yourself and Your Budget

Before coming up with a plan to pay off your credit card debt, it’s important to understand your individual psychology and budget. Ask yourself why you accumulated so much debt in the first place. Was it due to overspending, an unexpected emergency, or something else? 

Understanding the root cause of your debt can help you come up with a solution that is tailored to your specific situation.

By looking at your monthly statement and seeing where your money goes, you can also get a better understanding of your budget. Knowing how much you have coming in and going out each month will help you come up with a realistic payment plan. 

If an expensive coffee shop habit or online shopping addiction is eating into your budget, it may be time to unsubscribe to those tempting emails and find more budget-friendly alternatives.

It’s also important to understand where you are when it comes to your personal balance sheet. By knowing exactly how much you make after taxes and your expenses, you can calculate how much disposable income you have each month. This will give you a better understanding of how much money you can put towards paying off your credit card debt.

Once you have that figure, you can enter it into a credit card debt calculator to see how long it will take you to pay off your debt based on different payment amounts and interest rates. This can help you set a realistic goal for paying off your $20,000 in credit card debt. 

A few hundred dollars more paid per month may reduce the total payoff time significantly. Visually seeing these numbers may influence you to seek that promotion or to create additional sources of income like taking on a part-time job or starting a side hustle.

Snowball Method vs. Avalanche Method

When it comes to tackling credit card debt, there are two popular methods – the snowball method and the avalanche method. Both have their own benefits and it’s up to you to decide which one is right for you.

The snowball method involves paying off your smallest debts first while making minimum payments on larger balances. 

For example, if you have multiple credit cards with balances of $500, $1,000 and $5,000, you would focus on paying off the $500 balance first while making minimum payments on the other two. Once that is paid off, you move on to the next smallest balance. This method can provide a sense of accomplishment as smaller debts are paid off faster.

The avalanche method focuses on paying off debts with the highest interest rates first. While this may take longer to see results, it can ultimately save you more money in the long run as you tackle high-interest debt first. 

Using the previous example, you would focus on paying off the $5,000 balance with a higher interest rate before moving on to the others.

As you can see, these two methods seem to contradict each other. However, the key is to choose the method that works best for you and your psychology. 

If you need that momentum to keep you motivated, then the snowball method may be for you. If you are motivated by saving more money in the long run and can stay disciplined, then the avalanche method may be a better fit.

Understanding Compound Interest and Selling Assets

One reason why those with $20,000 or more in credit cards find themselves struggling to pay it off is because of compound interest

Compound interest means that not only are you paying interest on the original amount you borrowed, but also on the accumulated interest as well. This can quickly add up and make it difficult to make a dent in your debt.

To combat this, consider selling any assets you may have such as a second car or jewelry that you do not need to put the money towards your debt. By doing so, you can decrease the amount of interest you owe and potentially pay off your debt faster. 

If the second car, for example, is not driven often and it is declining in value, selling it can be a smart financial decision as a lump sum can be used to pay off a significant portion of your debt.

Debt Consolidation Can Be A Smart Move

Rarely does a single credit card holder have only one card which equates to $20,000 or more. More often than not, individuals have multiple credit cards with different balances and interest rates. 

Keeping track of all these payments can become overwhelming and can cause missed or late payments. 

This is where debt consolidation comes in – combining multiple debts into one single payment. Debt consolidation can simplify your finances by giving you one monthly payment to focus on instead of juggling multiple payments. 

It can also potentially lower your interest rate and therefore save you money in the long run. 

This is because rather than paying 25% on two credit cards for example, each with $10,000 worth of debt, you can consolidate them into one loan with a lower interest rate, potentially saving you thousands of dollars over time.

Debt consolidation is often the most simplest and immediate way to consolidate your debt, but other options such as a balance transfer can also be considered depending on your financial situation. 

At Americor, we understand the importance of managing your finances wisely. 

As America’s trusted source for debt relief solutions, we aim to empower you with financial knowledge that can lead to informed decisions, whether it’s about savings, investments, or managing debt.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider a free consultation call with one of our certified Debt Consultants, who can provide personalized advice tailored to your specific needs.

By taking proactive steps today, you can put an end to your financial stress and work towards a brighter financial future. 

Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!


Aaron Sarentino

Aaron oversees executive, administrative and management functions for the firm. Aaron has a Bachelors in Business Administration from Pepperdine University. He is responsible for helping customers at every stage of the debt settlement process and focused on building loyalty to ensure long-term client retention by addressing customer issues. Aaron plays a pivotal role in the upliftment of the Americor team to ensure the best possible customer experience for clients.