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I have $20K in credit card debt and pay $400 a month just in interest. I’m worried about this ‘large sum’ of interest I’m paying. What should I do? 

Different ways to tackle credit card debt

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Question: I have two credit cards and a total debt of $20,000. I pay about $400 interest in total monthly. I usually try to pay a little more than the minimum due monthly, and I’ve made 100% on time payments. I’m concerned about the large sum of interest I am paying. Is it advisable to refinance my credit cards with a personal loan? If this is a good option, which refinance company would you recommend?

Answer: First of all, congratulations on diligently making your payments on time. You’re right to consider refinancing this debt to a lower rate as you’re paying a lot in interest — a personal loan (see the lowest personal loan rates you may get now here) is one way to do that, a 0% interest balance transfer credit card is another, and you might also consider calling a nonprofit credit counseling firm. Let’s start with the 0% balance transfer.

Sara Rathner, credit cards expert at Nerdwallet, notes that a balance transfer could be a good option here (assuming you can qualify and repay the balance during the promotional period), and adds that a number of balance transfer cards are offering 0% interest for one to two years. These include:

  • Citi® Double Cash Card, which offers 0% on balance transfers for 18 months (then 18.24% – 28.24% variable APR), plus cash rewards that let you earn unlimited 1% cash back on all purchases, plus an additional 1% as you pay for those purchases.

  • Capital One SavorOne Cash Rewards Credit Card, which offers 0% on balance transfers for 15 months (then 18.24% – 28.24% variable APR), plus 3% cashback on dining, entertainment, various streaming services and purchases at grocery stores, and 1% on all other purchases.

  • Citi Simplicity® Card, which offers 0% on balance transfers for 21 months (then 18.24% – 28.99% variable APR), which is one of the longest 0% periods available.

Paying no interest for a time could save you hundreds, even thousands of dollars, but you have to ensure you pay the balance before the promotional 0% period ends (or else you’re going to get hit with a high interest rate when it ends). Here’s what to know about balance transfer cards:

Balance transfer credit card pros and cons



0% introductory APR rate

There may be a transfer fee associated with the card

Can be used for debt consolidation

After the 0% introductory APR term expires, the APR could be higher than your current card

With all of your money going towards paying down your debt, instead of any interest, you can pay debt off faster

Applying for a new credit card can ding your credit score

Some balance transfer cards offer perks and rewards

Balance transfer cards often require higher credit scores to qualify

Have a question about getting out of debt? Email

Personal loan pros and cons

Personal loans are another option that may be available to those with lower credit scores. “The APR won’t be 0% but it may be lower than what your credit cards charge, which can help you save on interest payments,” says Rathner. Plus, you’ll have a set monthly payment for a specific period of time, which can be easier to budget for. 



Fixed interest rates mean you know exactly how much you’ll have to pay back

Interest rates can be high for those with poor credit

Personal loans may fund in as little as 1 business day

Personal loans often have fees attached

Borrowers don’t need to put up collateral to take out a personal loan

Personal loans may have higher monthly payments than credit cards

Interest rates on personal loans tend to be lower than credit cards

Not paying back a personal loan can lower your credit score

Personal loans can be used for just about anything

Might lead a borrower to spending more just because they have money readily available

Whether or not you should pay off your debt bill with a personal loan depends in part on the current APR you’re paying on your card debt and what type of rate you could get with a refinancing company, says Nick Ewen, director of content at The Points Guy.

You can use this link from Bankrate to shop around for personal loans; look for the personal loan company that offers both the lowest interest rate and best terms, including low fees.

To learn more about whether or not a personal loan is right for you, Marketwatch Picks put together a guide that includes everything you need to know on the basics of personal loans as well as the current rates available.

Balance transfer, personal loan or another option?

If you can repay the balance in the 0% promotional period of a balance transfer card, that will likely be your most economical bet. But that may be impossible. And it’s key that you “crunch the numbers and make sure that any of these would result in better rates and lower interest payments,” says Ewen.  (See the lowest personal loan rates you can get here.)

And, according to Ted Rossman, senior industry analyst at, there’s actually another route you may want to consider taking. While he says he often recommends a 0% balance transfer card and low-rate personal loans as useful debt management strategies, in this case he says your best option is to engage with a reputable nonprofit counseling agency such as Money Management International.

“That’s because the best balance transfer and personal loan terms are reserved for people with strong credit scores. $20,000 is a lot of credit card debt and it sounds like you’re having trouble making progress,” says Rossman. Utilizing a nonprofit counselor will likely yield a much lower interest rate than you could obtain on your own and the debt management plans they offer function similarly to personal loans but with an easier qualification process and more hand-holding along the way. 

The advice, recommendations or rankings expressed in this article are those of MarketWatch Picks, and have not been reviewed or endorsed by our commercial partners.


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