How To Pay Off More Credit Card Debt Before Holiday Shopping Starts
A recent Bankrate survey finds that about half of holiday shoppers have already started buying or plan to by Halloween and most of them plan to use credit cards to pay for at least some of their purchases. According to CNBC and the Federal Reserve Bank of New York, credit card debt in the U.S. has reached a record high of $1.03 trillion and the average consumer carries about $6-thousand in credit card debt – which is a 10-year high.
On top of that, a lot of Americans are also carrying more credit card debt month to month and they’re paying a huge amount for having it, as the interest rate is now about 21%, according to the Federal Reserve Bank of St. Louis. But Lending Tree reports that the average interest rate on new card offers is 24.45%, the highest since they started tracking those rates in 2019.
Fortunately, there are some strategies that can help us start paying off credit card debt before we start charging our holiday shopping.
- Know what you owe – Step one is getting a handle on how much you owe. That includes knowing what interest rate you’re paying on the total balance of each card. When you figure out how much you owe and what you’re paying to borrow that amount, it’ll be easier to come up with a plan to pay it down.
- Review your credit report and score – You can get a free credit report online from the three major credit rating agencies – Equifax, Experian and TransUnion at AnnualCreditReport.com. Check them for errors and incorrect information, which you can dispute online. These reports won’t include your credit score, but credit card companies often let customers see their scores.
- Consider consolidating your debt – Using a 0% interest balance transfer card is one of the best ways to consolidate credit card debt, but you may need a credit score of 700 or higher to get one. A personal loan is another option, which can have an APR of around 12%.
- Work with the credit card company – Asking them for a lower rate sometimes works, as a Lending Tree survey finds around three-quarters who asked for a lower rate on their credit card in the past year got it.
- Choose a repayment strategy and stick to it – There’s no quick fix, so come up with a plan and stick to it.
