Credit card debt is a type of debt that accumulates when you use a credit card to make purchases and earn interest on those purchases. You aren’t alone if you find yourself in this type of debt. An estimated 340 million Americans have some form of debt, and some form of credit card overspending, and the average cardholder has around $90,460 in credit card debt according to a 2021 report.
There are many ways people get into credit card debt. For example, some people spend more than they can afford and use their credit cards to cover the difference. Others may have unexpected medical bills or other emergency expenses that they must put on a credit card. No matter how you end up with credit card debt, finding a way to get out of it is essential. The sooner you start paying off your debt, the less interest you will have to pay, lessening your debt burden. Learn more on how to reduce holiday debt.
No matter how you end up in credit card debt, it’s important to find a way to get out of it. The sooner you start paying off your debt, the less interest you will have to pay. And if you aren’t able to make progress on your own, there are plenty of resources and programs available to help you get out of debt.
Tips to Get Out of Credit Card Debt
Getting out of credit card debt isn’t always fun, but it is possible. With a little effort and some help, you can get your finances back on track and become debt-free. In this guide, we’ve outlined 8 tips for getting out of credit card debt.
- Pay Off Your Most Expensive Credit Card First
One of the longest-running pieces of advice when it comes to paying off credit card debt is to start with your most expensive card first, aka the card you owe the most money on. If your credit cards are all relatively equal in terms of what you owe, take a look at what card has the highest interest rate and pay that off first before you try to pay off any other card fully.
- Pay More Than the Minimum Payment
One of the reasons credit card debt can increase in such a short amount of time is interest. When you make a minimum credit card payment, that payment doesn’t typically cover interest rates, preventing you from getting ahead of your debt. When possible, it’s recommended to pay more than the minimum payment. For example, if you’re minimum payment is $42, consider rounding up to $50 to cover interest.
- Pay Often on Your Credit Card
Making more than one payment to your credit card in a month is a great way to get out of credit card debt. Paying often on your credit card also looks great to creditors.
- Practice Healthy Financial Habits
While it’s easier said than done, practicing healthy financial habits may help you get on a debt-free path. For example, consider creating a monthly budget that allows you to allocate more cash to your credit card payments.
- Negotiate With Creditors
Try to negotiate with your creditors. You may be able to get them to lower your interest rates or agree to a payment plan that works better for you. While there is no guarantee the negotiation will be successful, it’s always worth a shot to ask, as many creditors have special programs for this purpose.
- Consolidate Your Credit Card Debt
Consolidating your credit card debt involves taking out a new loan to pay off your outstanding credit card balances. Credit card consolidation can help you get a lower interest rate and make one monthly payment instead of several.
- Use a Debt Management Program
Debt management programs can help you negotiate with your creditors and set up a repayment plan that works for you. There are many debt management programs out there, so it’s important to find one accredited by the Better Business Bureau (BBB).
- File for Bankruptcy
Filing for bankruptcy should be a last resort. However, it is sometimes the best option if you cannot make financial progress on your own or with a debt management program.
Get Out of Credit Card Debt Today
There are several ways to get out of credit card debt. No matter what route you decide to take, the most important thing is that you take action and get started on your path to financial freedom. With a little bit of effort, you can get your finances back on track and become debt-free.
If you’re struggling with credit card debt, Americore is here to help. We know that debt is hard, so we provide debt relief plans for people every day. Visit Americor.com to submit an application or learn more about our debt relief solutions.