How long does it take to pay off a $5000 credit card?

2.5% of the balance (inclusive of interest): It would take 505 months to get rid of your $5,000 credit card balance making just minimum payments at 2.5% of your balance.

What is the minimum payment on a $5000 credit card balance?

Apply the percentage to your current credit card balance and then add your fees and past-due amounts. First, you'll owe 2% on the balance of $5,000, then you'll add $120 past due and $80 in late fees. That would make your minimum payment $300 .

Is 5k credit card debt a lot?

In fact, nearly 25% of U.S. consumers owe more than $5,000 on their credit cards, according to a recent survey by First Tech Federal Credit Union. If that's the boat you're in, you may be eager to pay down that debt. And here are three options to look at in that regard.

How much is the monthly payment on a $5 000 credit card?

To pay off $5,000 in credit card debt within 36 months, you will need to pay $181 per month , assuming an APR of 18%. You would incur $1,519 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

How do I pay off my credit card debt aggressively?

The snowball method is a debt-repayment strategy that focuses on paying down the account with the lowest balance first. As you direct your larger payments toward that balance, you continue to make the minimum payments on your other accounts so you don't end up paying late fees, hurting your credit or even defaulting.

Which is the least costly way to pay off your credit card debt?

If you own your home, your equity could be a cheaper way for you to pay off your credit card debt. For example, you may be able to use a home equity loan or home equity line of credit (HELOC) to borrow against your equity at a competitive interest rate and then use the money to pay off your credit card debt.

5 ways to pay off $5,000 in credit card debt (2024)

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MoneyWatch: Managing Your Money

By Joshua Rodriguez

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

Here are a fewways to pay off $5,000 in credit card debt quickly:

Take advantage of debt relief programs

Debt relief programs can offer an effective way to get out of debt. Regardless of the program you choose, you'll likely have a fixed payment that shrinks as you pay off your balance.

Debt consolidation programs: Debt consolidation programstypically combine multiple debts into one with a lower interest rate. In most cases, this involves a debt consolidation loan with a fixed interest rate and minimum payment. In some cases, the debt consolidation company may negotiate your interest rates with your lenders on your behalf. Either way, lower interest may equate to meaningful savings.
Debt settlement programs: Debt settlement programs negotiate on your behalf with the goal of reducing the total amount of credit card debt you owe. If you choose the debt settlement route, it may have a negative impact on your credit score. On the other hand, you can also expect significant savings and relief in the midst of financial hardship.

Find out how a debt relief program can help you find financial stability now.

Take a strategic approach

You can also get strategic with your payments to pay your debts off faster. Two common ways to do so are the debt snowball and debt avalanche methods. Here's how they work:

Debt snowball: With the debt snowball method, you make minimum payments to all your credit card lenders with the exception of your lowest balance. Send all of the extra money to this account. In doing so, you'll pay off smaller balances quickly, resulting in a pick-me-up that motivates you to stay on track.
Debt avalanche: Make minimum payments on all but your credit card with the highest interest rate. Send all excess payments to that card account. Once you pay that account off, send all excess payments to your next highest rate. Repeat until all of your debts are paid off.

Tap into your home's equity

"Home equity loans offer fixed interest rates, which is one of the biggest benefits for this specific loan type," says Darren Tooley, senior loan officer at Cornerstone Financial Services in Southfield, Michigan. Not to mention, the rates on home equity loans are typically far lower than credit card interest rates.

If you own a home, you could use one of these loans to pay off your credit card debt.Home equity loans also allow "you to set up a monthly budget and know exactly how much the monthly payment will be," says Tooley.

Take advantage of financial windfalls

Every once in a while, you may come across excess cash. That may be in the form of a holiday bonus at work, a refund from a tax return or something else entirely. And, when you get your hands on this extra money, it's typically wise to use it as a means to pay down, or pay off, your high-interest credit card debt.

Cut expenses where possible

Chances are that there are ways for you to cut expenses without impacting your quality of life. For example, if you enjoy a cup of coffee every morning at the local coffee shop, you could save a couple of dollars every day by making your coffee at home. That doesn't sound like much, but $2 per day is about $60 per month, which could help you pay off your credit card debt. There are plenty of other potential ways to cut expenses, too.

The bottom line

While credit card debt is stressful, you don't have to live with that stress forever. Use the options above to put your debt behind you. And remember, if you're having a hard time cutting into your balances, credit card debt relief programs can help you find financial stability.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he's not working, he enjoys time with his wife, two kids, two dogs and two ducks.

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