Credit card debt can be a daunting financial burden due to its high interest rates, which reached an average of 21.59% in February 2024. For the average American credit card balance of $6,501, this translates to $785 in interest if paid off in 12 monthly payments of $607. Lower monthly payments could result in interest costs matching the amount borrowed. However, there are ways to tackle this debt effectively.
1. Balance Transfer Credit Cards: These cards allow you to transfer your debt to another card with a lower interest rate, potentially eliminating interest payments. Be mindful of balance transfer fees (3-5%), and the credit limit may require multiple cards to cover the full balance.
2. Negotiate Interest Rates: Contact your credit card company to negotiate a reduced interest rate or a repayment plan. Some companies may offer temporary lower rates or settle for a smaller upfront payment.
3. Debt Consolidation Loans: These loans combine multiple credit card balances into one monthly payment with a lower APR, helping you save on interest and pay off the principal faster.
While paying off $6,500 in credit card debt can feel overwhelming, these strategies can help you regain control. Stay focused, make a plan, and celebrate small victories along the way to stay motivated.
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