While credit cards may seem like a solid backup plan when the car breaks down or you just need to buy that pair of shoes, balances can get high fast. Managing debt can seem overwhelming, especially when trying to chip away at high-interest credit card debt. But it doesn’t have to be impossible.
As you try to better manage your finances, consider these three things:
1. Know What You Owe
Every good money manager knows how much they need to pay out each month. If you have multiple credit cards, you can lose track of how much you owe fast. Take some time to go over your finances and add up your credit card debt so you can make a plan.
2. Interest Rates Are Still Hovering Higher Than 20%
Despite rate cuts in the past year, interest rates are still high. While it’s good news that interest rates aren’t as historically high as in 2024, repayment is still challenging. According to Bankrate, as of June 25, the average credit card interest rate was still 20.15%.
3. Your Credit Card Balance Keeps Going Up
As long as you make your minimum payment each month, you’ll keep your credit in good standing. But your balance could still grow even if you’re diligent about your monthly payment. To see your balance shrink, you’ll want to put more toward the balance each month. If that’s not possible, a credit counselor can help.
Try Our Free Virtual Counselor
Before you talk to a credit counselor in person, try our free MyVirtual Counselor tool, which allows you to privately explore your potential savings by enrolling in a debt management plan (DMP). By enrolling in a DMP, a credit counselor can work with your creditors and consolidate your credit cards into one affordable monthly payment while reducing your interest rate, all to be paid off in three to five years. Before you schedule an appointment, just input your debt, assets, and income to get you started with our virtual tool.
Bottom Line
Paying off credit card debt isn’t always easy, but with a smart plan and consistent effort, you can speed up the process and take control of your finances.
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Knowing your options can help you prepare your finances for the next step, whatever that may be.
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