$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt. There are a few things you can do to pay your debt off faster - potentially saving thousands of dollars in the process.
Transferring your balances to a single loan or card with lower rates can save you money on interest and help you pay off debt faster. Paying off $5,000 in debt can take anywhere from six months with a balance transfer card to almost 19 years if you just make minimum payments.
Key takeaways. Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%. Any debt-to-income ratio above 43% is considered to be too much debt.
Typically, debt collectors will only pursue legal action when the amount owed is in excess of $5,000, but they can sue for less. “If they do sue, you need to show up at court,” says Lewis-Parks.
If you cannot afford to pay your minimum debt payments, your debt amount is unreasonable. The 28/36 rule states that no more than 28% of a household's gross income should be spent on housing and no more than 36% on housing plus other debt.
After all, the average American carries approximately $8,000 in credit card debt and with interest charges being calculated at today's high interest rates, it's surprisingly easy to find yourself trapped in a cycle of credit card debt with no end in sight.
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
It will take 32 months to pay off $5,000 with payments of $200 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
While repaying your debts is important, sometimes circumstances make it difficult. But do debts ever really expire? The accurate answer is: no, they don't.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
If it's between 43% to 50%, take action to reduce your debt load; consulting a nonprofit credit counseling agency may be helpful. If it's 50% or more, your debt load is high risk; consider getting advice from a bankruptcy attorney.
U.S. consumers carry $6,501 in credit card debt on average, according to Experian data, but if your balance is much higher—say, $20,000 or beyond—you may feel hopeless. Paying off a high credit card balance can be a daunting task, but it is possible.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
Debt avalanche: Make minimum payments on all but your credit card with the highest interest rate. Send all excess payments to that card account. Once you pay that account off, send all excess payments to your next highest rate. Repeat until all of your debts are paid off.
Overall consumer debt has increased for Americans, average credit card balances jumped to $7,236 according to Lendingtree's 2025 Credit Card Debt Statistics. Debt.com's latest survey of 1,000 credit card users shows 1 in 5 have between $10,000 and $30,000 in credit card debt.
A debt that has a high interest rate or fees could also be considered bad debt, even if you use the debt for an essential purchase. One way to compare loans is to calculate the annual percentage rate (APR) of the various options to see which one will cost more on an annualized basis.
The average life is the length of time the principal of a debt issue is expected to be outstanding. Average life does not take into account interest payments, but only principal payments made on the loan or security.
A debt doesn't generally expire or disappear until its paid, but in many states, there may be a time limit on how long creditors or debt collectors can use legal action to collect a debt.
The median individual income in for Americans in 2022 was $56,368. Median means that half had a higher income, half had a lower income. The average American household debt load, including mortgage, is $101,915.