How Long Does It Take to Pay Off Credit Card Debt?

 Over half of credit cardholders in the U.S. have debt. This means most people aren’t paying off their credit card balances month to month; they’re paying a portion of what they owe while the remainder accumulates interest.

This debt cycle quickly becomes expensive, especially when you consider the long-term implications of paying interest… then paying interest on the principal plus that interest. Considering that credit card debt carries one of the highest average APRs—typically around 15 percent at the low end of the spectrum and around 21 percent at the higher end—it’s very apparent how damaging it can be long term. While paying the minimum balance prevents late fees and charge-offs, it won’t protect cardholders from racking up interest. Only finding a way to eliminate outstanding balances can put an end to that.

This begs the question: How long does it take to pay off credit cards? It may surprise you to see how interest looks in this equation. Here’s an example, plus some strategies for tackling debt at the source meant to speed up the journey toward alleviating costly credit card debt.

Paying the Minimum on Credit Card Debt

Here’s an example from CNBC: Say you carry the national average in credit card debt, around $4,293. The card in question carries the average APR of 17.73 percent. If you pay a minimum balance of three percent, or $129, it’ll take you about 15 years to escape that single debt—and by the end of the process you’ll have forked over more than $3,800 in interest alone.

Now let’s consider what would happen if you pay 10 percent of your balance each month, or $430. You’ll have the debt paid down in about four years.

So, how long your debt takes to repay boils down to a few things: the interest rate on your card(s) and how much you’re paying toward your balance(s) each month. While you can pay only the minimum, it will cost you a lot more time and money over the long haul. This is why it’s always advisable to pay as much as you feasibly can each month.

Alternatives for Paying Off Credit Card Debt

Anyone who’s ever faced down thousands—and counting—in credit card debt knows it’s intimidating. It can feel pretty hopeless to know you’re on track to pay off your debt in a decade or more. If you’re in this situation, there are a number of more aggressive debt elimination strategies to consider.

If you’ve ever considered throwing in the towel and filing for bankruptcy because your debt feels endless, look into debt relief as an alternative that can be less damaging to your credit rating. Here’s what enrolling in a debt settlement program like Freedom Debt Relief entails:

After speaking with a debt consultant to make sure you’re a good fit, you’ll start depositing money each month into a special account. Once you’ve saved X amount, negotiators reach out to your creditors and attempt to settle—offering a lesser sum than your original balance. If creditors accept, you transfer the money from that account, pay the program a percentage fee and your debt has been relieved.

Another way to get rid of excessive credit card debt fast is to take out a personal or consolidation loan or taking low interest credit card, find out how to manage declined credit card or debit card at Daily Prosper. Pay off your high-interest credit card balances all at once. Then repay the loan over the course of the next few years, typically at a lower interest rate than you were paying on your cards. Some debt relief programs offer qualified enrollees an opportunity to combine settlement and consolidation, like Freedom Debt Relief’s Consolidation Plus loans that enable eligible participants to speed up the settlement process.

Last but not least, transferring your balance from a high-interest card to a card with no/low interest can earn you a break from the onslaught of interest accumulation. Be apprised you’ll pay a fee per balance transfer by doing this.

How long it takes to pay off credit card debt depends on how much, at what interest rate, and which strategy you use to do so.