How to pay off $20,000 in credit card debt in 3 years or less

Credit card debt can be easy to accumulate, especially in today's inflationary environment. And, nearly half of the American population owes balances to credit card companies right now. About 56 million of them have had revolving debt for more than a year.

If you're facing a significant amount of debt, you may be searching for ways to pay it off quickly. And, that makes sense considering that these revolving accounts can be costly thanks to the high interest rates they often come with.

But what if you have $20,000 in credit card debt and want to pay it off in three years or less? What are some ways to do that?

Find out how debt relief could help you pay off your credit card balances. 

How to pay off $20,000 in credit card debt in 3 years or less

If you have $20,000 in credit card debt that you need to pay off in three years or less, you have multiple options to consider, including:  

Take advantage of a debt relief service

One potential way to get out of debt quickly is to take advantage of what a debt relief service offers. If you don't see a feasible way to pay off your credit card balances, a debt relief program may make doing so possible. 

Debt relief companies typically offer one, or both, of the services below: 

• Debt management: Debt management involves experts negotiating with your lenders in an attempt to reduce your interest rate. They typically create an affordable, effective payment plan to help you pay off your debt as quickly as possible.  
• Debt forgiveness: Credit card debt forgiveness, or debt settlement, is a program that involves negotiations with your lenders in an attempt to reduce your total balance owed, resulting in those lenders forgiving a portion of your debt. Though these programs can hurt your credit score and have potential tax implications, they are a viable option for borrowers who are struggling to make their credit card minimum payments. 

With either option, debt relief companies typically attempt to get you out of debt within 24 to 48 months. So, it's likely that they'll be able to help you pay off your $20,000 in debt in three years or less.   

Compare leading debt relief service providers today. 

Consolidate your debt with a home equity loan

It may also be smart to look to your home equity as a potential credit card debt solution. 

"Leveraging a home equity loan is a good option when it comes to debt consolidation," says Eileen Tu, VP of product development at Rocket Mortgage. "Oftentimes, unsecured lines of credit such as credit cards carry higher interest rates as compared to home equity loans."

Interest has a big impact on the time it takes to pay off credit card debt, so using a home equity loan to reduce your interest rate could save you time and money. So, using your home equity to "consolidate those debts into a lower interest rate can make sense," says Tu. 

Considering the difference between the average home equity loan interest rate — which averages 8.97% today — and the average credit card interest rate — which is over 20% currently — a home equity loan that is used to consolidate your credit card debt could make it easier to pay off what you owe. Doing so could also make it more realistic to pay off your $20,000 in credit card debt in three years. 

Take advantage of 0% balance transfer credit cards

If you have a good credit score and aren't struggling to make your minimum payments but want to pay your debts off quickly, a balance transfer credit card could help. These credit cards often have promotional 0% rates or low interest rates that can make it easier to pay off what you owe. 

So, it can make sense to consider transferring your debt to a balance transfer credit card with 0% interest to help you pay it off faster. If you haven't paid off the full balance by the time the promotional interest rate expires, look for a new balance transfer credit card with a 0% promotion to transfer your balance to — and continue doing so until you pay your debt off. 

Keep in mind that at 0% interest, you would need to pay over $550 per month to pay $20,000 off in three years. Moreover, balance transfer credit cards typically come with transfer fees. So, you'll need to consider these fees as part of the debt repayment plan. 

The bottom line

It can feel overwhelming to have $20,000 in credit card balances that need to be paid. You don't have to struggle with your debt forever, though. By taking advantage of one of the options above, you may be able to pay off what you owe in three years or less. 

This story has been updated to clarify the difference between debt management and debt consolidation programs.