Have Over $50,000 in Credit Card Debt? Here’s What to Do

Credit card debt has a way of sneaking up on you. Maybe you experienced a job loss or health event, or perhaps it was a series of smaller, but ultimately significant, expenses that led you to where you are. Regardless of the reasons for your debt, having $50,000 in credit card debt can feel like a problem without a real solution.

But that isn’t necessarily true.

Here are three steps you should take if you’re facing this steep debt amount.

Start with the repayment plan you can afford

When you have $50,000 in credit card debt, it can be difficult to know where to start. But when you’re up against such a high debt amount, the best way to get out of that debt is simply to start. And that means using whatever repayment plan you can to make a dent without exceeding your budget, even if it feels minimal.

One option you may consider is the debt snowball method, which has you repaying your debts from the smallest amount to the largest. This can help if you have one or two cards with smaller balances because you get the mental boost of paying off those cards relatively early on.

Or you may consider the debt avalanche method. This instead has you paying your debts off by order of highest to lowest APR. That way, you can save the most on interest payments.

The method you choose should be one you can reasonably afford. That can mean different things for different people. And while it’s a good idea to cut as many unnecessary expenses as possible when tackling a major debt amount like this, you’ll have to decide the pace that works for you.

Track your credit along the way

Your credit score may not seem like the most important financial factor you need to consider when paying off $50,000 in credit card debt. But there are a couple of key benefits to tracking it.

First, you can start to see the positive impacts of your debt repayment in real time. That’s because credit scores consider your total debt amounts, so as those decrease, your score should improve.

Second, the higher your credit score, the easier it is to save money on your credit card debt. For example, you may be able to qualify for a limited-time 0% APR balance transfer card, which requires a balance transfer fee (often ranging from 3% to 5% of the total transfer) but offers a period of interest-free financing. Or you may consider a personal loan to access lower interest rates for the remaining debt.

These tools are often credit dependent, so you’ll need a good score (which most lenders consider to be 670 or higher).

Don’t forget to save money

When you’re paying down debt, it’s easy to slip into the trap of foregoing saving money so that you can put all of your extra cash toward your debt. But the danger with that approach is that you won’t have any choice but to take on more debt if something unexpected happens, like a popped tire or medical emergency.

Even if you only feel comfortable saving $25 a month during the first few months of your repayment journey, saving money should be a priority until you have at least three to six months’ worth of necessary expenses stashed away. For instance, if you need at least $5,000 a month to pay for things like rent, health insurance, utilities, and groceries, you’d want to have at least $15,000 saved.

Paying off $50,000 in credit card debt takes determination, stamina, and a strategic mindset. But if you create a realistic payoff plan and save money where you can, you can accomplish this daunting task.

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