It may help to know that if you have a lot of debt, you are not alone.
- The average consumer owes $6,320.98 on their credit card.
- Since credit cards charge a lot of interest, paying off that debt as quickly as possible is key.
- You can try consolidating your debts through personal loans or 0% APR credit cards, to make paying them off easier.
Maybe you racked up a huge credit card balance after overspending on vacation. Or maybe your balance has been slowly but steadily rising since inflation kicked in and nearly every bill you’re responsible for has gone up in cost.
If you owe a sizable amount on your credit card, you may feel comfortable knowing you’re in good company. As many as 42% of US adults say they have credit card debt, according to New York Life’s latest Wealth Watch survey. And the average balance carried by US consumers is $6,320.98.
However, having credit card debt can wreak havoc on your finances due to the large amounts of interest credit card companies are known to charge. So the sooner you can pay off that debt, the better.
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Consolidating your debts can pay off
The higher the interest rate on your credit card debt, the more difficult it will be to pay it off. So you may want to find a way to consolidate your debt and lower the interest rate in the process.
You have several options to look at in this regard. First, you can apply for a personal loan, which allows you to borrow money for any purpose, and use the proceeds to pay off your existing balance. You then simply pay back that personal loan in installments.
The upside to going this route is that you’re likely to get lower interest rates on personal loans than what your credit card charges you. Plus, personal loans offer the benefit of a fixed interest rate, which means you don’t have to worry about your monthly payments increasing over time.
Another debt consolidation option to consider is a balance transfer. Here, you can simply move your existing credit card balance to a new card with a lower interest rate.
Many balance transfer offers even come with a 0% introductory rate for a limited time. And getting a reprieve from racking up interest can make your debts easier to pay off. Plus, this way, you’re only making one credit card payment each month — not several.
Do your best to get rid of that debt
Credit card debt can not only cost you a lot of money, but too much of it can cause damage to your credit score. So whether you decide to consolidate your credit card debt or just tackle your balances one at a time in an order that works for you, do your best to get out of debt as quickly as possible.
You may need to take on a second job or seriously cut back on expenses to reduce your balance. But doing so can, depending on the amount you owe, save hundreds or even thousands of dollars in interest. And it’s money you’d definitely rather keep for yourself than turn it over to a bunch of credit card companies.
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