Credit card debt weighs on about 46% of Americans, and the average person has an outstanding balance of $6,093, according to a survey by real estate data company, Clever.
The survey also indicated that credit card debt disproportionately affects older Americans. Baby boomers carry 157% more credit card debt than Gen Z and 33% more than Millennials. Baby boomers also owe an average of $8,208 in credit card debt, while Gen Y owes an average of $6,182 and Gen Zer has an average balance of $3,196.
In September, the The Federal Reserve has raised interest rates for the fifth time this year by 0.75 percentage point. And there are plans to keep raising rates to fight inflation next year, which could raise the interest rate on your credit cards.
If you’re struggling with high-interest debt, a personal loan could help you pay it off at a lower interest rate and lower your monthly payments. You can visit Credible to compare personal loans rates from multiple lenders at once without affecting your credit score.
Financing needs take priority over credit card debt
Amid high inflation, many Americans (50%) have fallen behind on their credit card payments to cover basic necessities like food, shelter or utilities, the survey found.
About a third of respondents (31%) said they had missed credit card payments to buy food or groceries, while 29% did so to cover utilities and 26% said they had skipped payments to prioritize other forms of debt.
If you are struggling with debts, you can use a personal loan to consolidate them at a lower interest rate. An online marketplace like Credible can help you compare personal loan rates to find a lender that works for you.
Credit cards are the most stressful form of debt
In the middle of the possibility of an impending recession, credit cards are ranked as the most stressful source of debt, according to the Clever survey. He said 84% of Americans in credit card debt are stressed, and 20% are extremely stressed. Additionally, 11% of those in debt said it would take them more than five years to get back on their feet, while 3% said they would never get out of it. Even those not currently in debt were pessimistic.
“Of the 54% of Americans who are not currently in credit card debt, two-thirds (66%) are worried about getting into debt soon for the first time amid economic uncertainty,” Clever said in its survey. .
Whether you’re in credit card debt or worried about falling behind on your payments, Credible can help. You can talk to a personal loan expert at Credible to see if this financial product is the right option for you.
How to quickly pay off credit card debt
If credit card debt is holding you back, you have a few options that can get you back on track. Here are some tips on how to pay off your credit cards:
Offer a credit card repayment plan
If you have several credit cards, there are many ways approach the repayment of your debt. For example, cardholders can focus on paying off whoever has the smallest balance first, known as the debt snowball method. Or they can pay off the card with the highest interest rate first, known as the debt avalanche method. Credit card companies are required to report your cards’ interest rate and APRs on your statements. Take a look at these and start eliminating the bigger ones.
Consumers should also strive to make more than the minimum credit card payment. This will help you pay less interest over time and improve your credit score.
Compare balance transfer cards
Balance transfer cards, also called debt consolidation cards, allow you to transfer your credit card balance to a new credit card. Many balance transfer cards offer a 0% interest period that can last 12 months or more. This means that you will owe no interest on your balance for this period and all payments will go towards the principal balance.
If you are interested in a balance transfer card, Credible can help you compare multiple options without affecting your credit score.
Apply for cash refinance on your mortgage
If you have outstanding non-mortgage debt and equity in your home, you may benefit from cash refinancing. With a cash refinance, you replace your mortgage with a new, larger loan. You then get the difference between your new loan and what you still owe on your home in cash, which can be used to pay off high-interest debt such as credit cards.
If this option interests you, you can visit Credible to compare several mortgage refinance lendersall in one place.
Pay off credit card debt with a personal loan
You can also consolidate high-interest debt into a debt consolidation loan, which is a type of personal loan, at a lower rate. The average credit card interest rate was 18.43% in August, according to Federal Reserve Data. Meanwhile, Credible data have shown that personal loan rates can be as low as 4.99%.
Your interest rate depends on factors such as your credit score and lender discretion. You can use the Credible Marketplace to help you compare different personal lenders and find your personalized interest rate in minutes.
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.