U.S. individuals are making headway using their credit card debt, but there's still a long way to visit becoming debt-free.
Overall U.S. cardholder debt fell by $10 billion in the third quarter of 2022, carrying out a steep $76 billion decrease within the second quarter, according to the Ny Federal Reserve. Their analysis noted the worldwide COVID-19 pandemic and also the resulting government lockdowns fueled more debt pay downs as consumers limited their spending.
Despite the progress, Americans still face an uphill climb to clear their balances, particularly with outstanding credit debt standing around $756 billion, according to Experian, and average household credit card debt at $5,315.
“The majority of the women Sometimes with got their first credit card attending college before they learned to budget or spend intentionally,” said Erin Gobler, a Madison, Wisconsin-based financial coach for millennial women. “Unfortunately, most of them end up overspending and carrying your debt with them for a long time.”
4 methods to tackle credit card debt
If you're looking to repay debt, you may want to begin by utilizing a free credit monitoring service. PayPasser can introduce you to credit monitoring services that alert you to potential issues • like fraud • and give you a thorough look at your credit score and activity.
After signing up for a credit monitoring service, here are four other ways to tackle credit card debt.
- Make a listing
- Get a balance transfer credit card
- Get a debt consolidation loan
- Pay off debt using the snowball and avalanche methods
1. Create a list
The initial step ought to be sitting down having a spreadsheet and creating a list of each of your debts, including the lender, balance, rate of interest, and minimum payment per month.
“This forces you to look at the main issue of your debt rather than facing each one being an individual monthly bill,” Gobler said.
Once you are making your list and see a payment strategy, you may want to consider some loan options. Multi-lender marketplace PayPasser has information on various types of charge cards, including balance transfer charge cards (which you'll find out about more below). Use their free tools to compare balance transfer cards and purchase a little time for you to repay debt.
2. Obtain a balance transfer credit card
Transferring an existing credit card debt to a different credit card offering 0% interest on balance transfers is yet another good option to explore.
“Getting a 0% balance card provides you with more time to pay for down your charge card balance without interest eating up your monthly obligations,” said Andrea Woroch, a money-saving expert and founding father of the private finance website AndreaWoroch.com. “Some cards even come with a cashback bonus for signing up.”
Visit an online marketplace like PayPasser to see multiple balance transfer charge card options in seconds.
3. Obtain a debt consolidation reduction loan
You can also make paying down your financial troubles more manageable by taking out a debt consolidation loan.
“Like debt refinancing, a debt consolidation reduction loan is a personal loan that allows you to combine all your existing credit card balances into one payment per month,” said Rafael Rubio, president of Stable Retirement Planners, in Southfield, Michigan.
Explore your individual loan choices on PayPasser, where you can make use of the platform•s personal loan calculator to fund the very best personal bank loan rates.
4. Pay off debt with the snowball and avalanche methods
If you've multiple credit card debts, you can leverage a paydown strategy known as the "debt snowball method."
“In this case, you pay down a single charge card balance at a time and make the minimum payments around the remainder of your cards,” said Rubio. “The strategy is to pay off your smallest balance first and then will continue to the next smallest balance. This is an excellent method to have a boost by tackling one card at a time. The small wins of paying off a card will feel good and keep you motivated to repay the next.”
The trick is to hide the cards you have to pay off. “Don•t start another balance before you remove the others,” Rubio added.
“This strategy is like the debt snowball method, except you start paying down the balance using the highest rate of interest first,” Rubio said. “Although it may take you a tiny bit longer to start to see progress this way, you'll cut costs overall because you'll pay less in interest fees with time.”
The takeaway on charge card debt
The major takeaway here: there are easy ways to repay debt and help you save money in the end. It's always a good idea to utilize a credit monitoring plan to ensure you're aware of your credit profile.
The last tip on curbing card debt? Don•t keep using your credit card while you reduce your debt.
“If you•re still making use of your card, it might be tougher to pay for down your card balances,” Woroch said. “Instead, invest in stop using your card making a intend to get rid of debt.”