What should I do if I have $100k in credit card debt?

According to the Federal Reserve, the average credit card interest rate is around 16% as of August 2024, meaning $100,000 in credit card debt could accrue over $16,000 in interest per year if only minimum payments are made.

Consolidating high-interest credit card debt into a lower-interest personal loan or balance transfer card can potentially save thousands in interest charges over the life of the debt.

The CARD Act of 2009 requires credit card companies to allocate your monthly payment to the highest interest rate balance first, which can help pay down debt faster.

Negotiating with credit card issuers for reduced interest rates or hardship programs may be an option, especially if you've been a long-time customer in good standing.

Transferring balances to a 0% APR credit card can provide temporary relief, but it's crucial to have a plan to pay off the debt before the promotional period ends.

Debt snowballing, where you focus on paying off the smallest balance first while making minimum payments on other cards, can create momentum and motivate further debt reduction.

Using the debt avalanche method, where you target the highest interest rate debt first, can save the most money over time despite potentially slower initial progress.

Seeking credit counseling from a nonprofit agency can help negotiate with creditors and set up a debt management plan to reduce interest rates and consolidate payments.

In extreme cases, filing for bankruptcy may be an option to discharge credit card debt, though it will severely impact your credit score for up to 10 years.

Debt settlement, where you negotiate with creditors to pay a lump-sum amount less than the full balance, can hurt your credit but may be preferable to bankruptcy.

Maintaining a good credit score is crucial during the debt repayment process, as it can affect your ability to secure more favorable financing options in the future.

Automating minimum payments on all credit cards can help avoid late fees and penalties, which can further increase the overall debt burden.

Creating a detailed budget and tracking expenses can help identify opportunities to reduce spending and allocate more funds towards debt repayment.

Increasing income through a side hustle or freelance work can provide additional resources to put towards credit card debt.

Avoiding new credit card usage during the debt repayment process is essential to prevent the debt from growing even larger.