Need to pay off $10,000 in credit card debt? 3 options you may not have considered

With the cost of living and inflation elevated, many people use credit cards to cover basic needs. But carrying a balance comes at a price. 

According to the Federal Reserve, credit card interest rates average nearly 23% right now. If you have $10,000 in outstanding credit card debt with a 23% interest rate, you'll face almost $191 in interest for this statement cycle. Unless you pay off a large chunk of that balance, that interest grows, and next month, you'll get charged interest on the new, larger amount. 

Paying off five-figure credit card debt can feel overwhelming, especially if you've exhausted other options. If you've tried the debt avalanche and debt snowball methods or paid more than the minimum amount, you might need to look for some alternative approaches. Below, we'll detail some ways to get debt relief that you may not have thought of yet.

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3 debt relief options you may not have considered

Need help getting your debt under control? Here are three debt relief options you may not have considered:

Get a 0% balance transfer credit card

Credit cards are revolving lines of credit with variable interest rates. That means interest rates can change at the discretion of the credit card issuer, usually based on an index influenced by market conditions. 

Many issuers offer 0% balance transfer cards, which put off charging for an introductory period, usually lasting anywhere from 12 to 21 months, depending on the card. Leslie H. Tayne, Esq., an attorney and founder of Tayne Law Group, says you'll have time to chip away at your debt with this option.

"If you have good credit, you can apply for a new credit card with one of these introductory offers," she says. "The transferred balance will not accumulate interest during this period, which allows 100% of your payments to go toward reducing the balance."

Not all balance transfers will move over your total balance, so you might get stuck paying off the balance on your new 0% interest card and the old one. If that's the case, consider making minimum payments on your new card while paying as much as possible towards your old one since it charges interest. 

When that's paid off, try not to make any purchases with it and put all your extra cash towards the 0% balance transfer credit card. When the promotional period is over, interest gets charged on whatever the balance is.

"You may have to pay a balance transfer fee, which is anywhere between 3 to 5%," says Chris Browning, the founder and host of Popcorn Finance, a personal finance podcast. "But this is four to six times lower than your typical credit card interest rate. If you do not accumulate more credit card debt, this can be a great way to accelerate your debt payoff."

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Open a debt consolidation loan

If you have several credit cards with varying high interest rates, it might be difficult to keep track of all their outstanding amounts, due dates and interest rates, making repayment time-consuming. 

A debt consolidation loan is when you take a personal loan to pay off your high-interest credit card debt, often at a lower interest rate than what your currently paying on your debt. Then, you make monthly payments on your loan until it's paid off.

You can also consolidate your debt with a home equity loan. These tend to have lower interest rates than personal loans, but you use your home as collateral. If you fall behind on your home equity loan payments, you could lose your home through foreclosure.

Debt consolidation loans usually have fixed interest rates and terms of up to a few years.

Debt management and settlement plans

Sometimes, it's necessary to ask for extra help. Talk with a nonprofit credit counselor or a debt relief company about setting up a debt management plan. These counselors review all your outstanding debts and help you set up one monthly payment to the credit counseling agency, which disburses your payment to each of your creditors. They work with your creditors to pay your debt, and while it doesn't erase your debt, it helps you get on a payment plan that works for you. But you'll usually pay a fee for the agency's services.

In some cases, you might qualify for debt settlement. This is when a company negotiates to settle your outstanding debt for a lower amount than what's currently owed.

"This is more likely to be successful if you're far behind on payments and the credit card company is unlikely to get their money back," Tayne says. "Often, [creditors would] rather accept a partial payment of the balance than nothing at all, or have to spend time and money pursuing a lawsuit."

Some scammers prey on people who are far behind on debt repayment, so be cautious when vetting companies to handle your debt settlement. If a debt settlement company guarantees results, that's a red flag.

"If you pursue a credit card debt settlement, I recommend working with an attorney who specializes in this area since negotiations can be tough, and a professional may be able to secure a better deal than if you tried on your own," Tayne says.

The bottom line

Traditional debt payoff methods don't work for everyone. If you've tried making extra payments or the debt snowball and avalanche methods without too much success, there are other options. But remember that not every choice is right for everyone, and some involve more risk than others. Sometimes, talking to your creditors might be a good way to figure out your options.

"If you're struggling to make even the minimum payment, negotiate with your creditors," Tayne says. "In some cases, they may be willing to put you on a hardship plan that temporarily lowers your interest rate or monthly payment, helping you get back on track."