Getty Images
The Americans are unfortunately Credit card debt is no stranger to meand a new report from the Federal Reserve Bank of New York shows how quickly these problems are worsening. Total credit card debt across the country hit a record $1.14 trillion in the second quarter of 2024, according to the report — an increase of about $27 billion from a year ago. That represents a nearly 6% increase from a year ago.
Adding to the concern is a rising tide of payment offences among cardholders. According to the report, about 7.18% of credit card users fell behind on their payments in the second quarter of 2024, an increase of over 2% from the previous quarter. This increase in delinquencies indicates that a growing number of cardholders are struggling to keep up with their payments, at a time when the average ticket tariff is about 24%.
If you have been watching your credit card balances grow lately, or if you are one of the many who unable to keep up with your credit card payments, it is important to take steps now to Get rid of your credit card debt. While this may seem like a challenge, there are a few simple ways you can accomplish this.
Want to learn more about your debt repayment options? Find out more here.
How to get rid of your credit card debt now
The following strategies may help you eliminate your credit card debt:
Negotiate with your credit card company
One of the easiest approaches to dealing with your debt is Start a dialogue with your credit card issuerMany companies are willing to work with cardholders to find mutually beneficial solutions, such as lowering your interest rate or reducing fees. While this may not seem like a huge relief, remember that even a small reduction in your interest rate can add up to significant savings over time.
When you approach your card issuer, be prepared to explain your financial situation. And if you have a good payment history, use that as an advantage in the conversation. You may be surprised at what your issuer can offer you, especially if they believe it will help you stay as a customer and avoid default.
Chat with a debt help expert and start getting your high-interest credit card debt under control today.
Consider a debt relief program
For those struggling with significant debt, Forgive credit card debt (or debt settlement) program might be worth considering. These programs work by negotiating with your creditors to try to get them to accept a lump sum payment that is less than the full amount owed. The remaining amount of your balance will then be “forgiven.”
The can provide relief of overwhelming debt, but it is important to approach this option carefully. Debt relief can have consequences for Your creditworthiness and can have tax implications. In addition, not all creditors are willing to negotiate.
If you are considering this route, it may be useful to a reputable debt relief company. Debt settlement companies not only employ experts with negotiating skills, but they can also help you better understand the risks and benefits.
Consolidate your debts
From Consolidating your debtsThe goal is to consolidate multiple debts into a single, more manageable payment, often at a lower interest rate. This saves you interest and allows you to focus on paying off the principal faster.
There are several options for debt consolidationincluding debt consolidation loans offered by banks or credit unions. Or, if you are a homeowner, you might be able to Use the equity of your home to get a home loan with a lower interest rate.
Another possibility is a debt consolidation program through a debt relief company. In this option, the money is borrowed from a lender partner of the debt relief company. In return, the requirements for the borrower may be less stringent, as these companies are good at working with borrowers who high debt-to-income ratios or other credit problems.
Use a debt management program
A Debt management program is a structured repayment plan offered by credit counseling agencies. When you enroll in such a program, the credit counseling agency works with your creditors to lower interest rates and possibly waive certain fees. You then make a single monthly payment to the agency, which distributes the funds to your creditors.
These programs typically last three to five years and can be an excellent option for those who need help but do not want to take more drastic measures. In general, you will need Close your credit card accounts as part of the program requirements, which may have temporary effects Your creditworthinessbut the long-term benefits often outweigh this short-term disadvantage.
The conclusion
Paying off credit card debt is especially important in the current economic environment. Not only are interest rates high, but inflation and other economic hurdles could make it increasingly difficult to pay off your debt. Fortunately, there are several debt payoff strategies you can choose from, so find the one that best fits your situation. This will help you regain control of your finances and work toward a debt-free future.
