Whether from student debt, excess spending or general hardship, many people find themselves facing massive amounts of credit card debt at or beyond midlife. It can catch up quickly and deeply impact your day-to-day life.
Imagine the example of Jordan. At 49 she’s received a bonus check from her sales commissions of $22,000 after taxes, but she also carries significant consumer debt — $56,000 combined on her three credit cards to be specific.
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To this point, roughly $2,000 went towards paying these (including interest), not leaving a ton of room in her budget for other expenses or to whittle down her debt faster.
However, Jordan is now hoping to put her $22,000 bonus towards reducing her debt. But she is wondering what else she can do to help her improve her financial situation.
And Jordan is not alone. According to Federal Reserve Bank of New York, credit card balances rose by $24 billion during the third quarter of 2025, totalling $1.23 trillion (1). That’s up by 5.75% from a year ago.
If you’re hitting those credit limits and paying hundreds or thousands of dollars each month, chances are you’d love a better solution as well. And if you happen to come into extra cash, all the better.
Here are some options to consider along with your lump-sum payment.
Tackle high-interest debt by consolidating
Consolidating debt into one loan means one payment per month. This means a quicker and simpler payment than repeatedly paying multiple creditors. However, debt consolidation is only available to those with a minimum credit score.
If you qualify, consider making a down payment on this loan with any bonus cash you have.
This method can save hassle, time and even unnecessary interest. Additionally, for many, it’s easier to remember to pay one bill on time than several.
And, of course, depending on the interest rate of current debts, a lower-interest loan may save you money in the long term.
Use one of these common debt repayment methods
The snowball method involves paying off your smallest debt first, then working your way up to the largest one. This comes after making your minimum monthly payments.
Once the smallest debt is paid off, move on to the next-smallest and then the next. This momentum is like building a snowball: your payments get bigger as you work up from your smallest to your largest debt. What’s motivating for many is that sense of accomplishment as each debt disappears.
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The avalanche method, on the other hand, is where you pay off debt with the highest interest rate first (regardless of balance owed), followed by the next-highest interest rate and the next. Less interest will accrue, so you’ll save money in the long run. Those savings can be put toward your overall debt payments, which — when lowered — will eventually boost your credit score.
Switch to a different credit card
If your credit score allows, consider refinancing your debt with a balance transfer credit card. While these offer lower interest rates than standard cards, be aware of the transfer fees before applying for one — they are typically 3% to 5%. The total fee shouldn’t be higher than your current interest payments.
Pro tip: Issuers often offer a 0% APR to those who qualify. Be sure to do your research and look for a card that maximizes that promotional period, so you have the best chance of paying your balance in full without interest.
Tapping into your home equity
If you’re a homeowner and have equity in your property, accessing it to pay down your debt could be an option.
Check with your bank about a home equity line of credit, which may offer a lower interest rate than your credit cards. Closing costs or fees may apply, so be sure to consider them when comparing the total that you’d owe with a line of credit and without one.
Speak to an advisor
An advisor or professional credit counselor can assess your specific circumstances and share advice on budgeting, housing expenses and debt repayment.
Be sure to research the counselor’s qualifications and certifications in advance. When you’re ready to proceed, gather documents showing your income, debt, assets and expenses to illustrate your financial situation.
Credit counseling is often offered by non-profit organizations, sometimes for free. Typically, they can also create a personalized debt management plan, in which they negotiate lower interest rates or extended payment periods for you.
The arrangement involves you paying the organization monthly and it paying creditors on your behalf.
With these methods, you can approach your debt strategically and ensure you regain control of your finances faster.
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Federal Reserve Bank of New York (1)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.