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This Is How Much Money a $10K Credit Card Balance Could Cost You

Two people looking worried while reviewing bills at their kitchen table.

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Credit cards have many perks, but you need to be careful about how you use them. Because they only require small minimum payments every month, it’s easy to spend more than you can afford. If you end up with credit card debt, it can be difficult to repay. It’s also expensive, as the average credit card interest rate is now over 20%.

As you’d expect, it gets even more difficult (and more expensive), the higher your balance is. To show just how costly credit card debt can be, here’s a look at how much a $10,000 balance could cost you. And if you’re currently in this situation, we’ll also look at the best ways to get out of credit card debt.

How much a $10,000 credit card balance could cost you

The amount a credit card balance costs you depends on the interest rate and how much you pay toward it. For this example, we’ll use an interest rate of 20%, just under the current average.

You’re only obligated to make your credit card’s minimum payment. Each card issuer has its method for calculating minimum payment amounts, but many set the minimum as interest charges plus 1% of the balance, so we’ll use that. If you only make minimum payments, a $10,000 credit card balance will cost you $16,056.59 in interest and take 346 months to pay off.

Minimum payments on a $10,000 balance would start at $267 and decrease as you paid down what you owe. But if you kept paying the same $267 until your debt was paid off, you’d do it in 60 months and pay $5,810.26 in interest.

If you paid more than the minimum, you’d save even more. Here’s how the amount of interest and the payoff timeline change based on how much you pay:

Monthly credit card payment Total interest Payoff timeline
$300 $4,718.19 50 months
$400 $3,044.21 33 months
$500 $2,266.07 25 months
$750 $1,404.14 16 months
$1,000 $1,030.45 12 months
Data source: Author’s calculations.

How to get out of credit card debt

The most important part of getting out of credit card debt is paying more than the minimum. As you just saw, there’s a massive difference in how much interest costs you when you pay the minimum compared to when you pay more. And the more you can pay, the better.

Even if you’re dealing with a large amount of debt, every little bit helps. Just look at how paying off a $10,000 balance changes if you go from paying $300 per month to $400. You pay off your balance 17 months earlier this way and save nearly $1,700.

So, if you can work overtime or cut your spending to have more money to apply to your credit card debt, it’s absolutely worth it. The amount you pay has the biggest impact on how quickly you pay off debt — and how much it costs you.

There are also ways to refinance your credit card debt. The best options require a good credit score, meaning a score of 670 or higher. Here are two of the most popular options:

  • Balance transfer credit cards: These have a 0% intro APR on balance transfers, and some have introductory periods that last 15 months or longer. During the intro period, you can pay down your credit card debt interest-free.
  • Debt consolidation loans: These are personal loans designed for paying off debt. They generally have lower interest rates than credit cards. You’ll also be able to pay back your loan on a set timeline with fixed monthly payments.

Financial tools like these can help you pay back credit card debt. That being said, the key is still to pay as much as you can. It’s ultimately your payment habits that make the difference in getting rid of credit card debt.

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