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How to Get Help With Credit Card Debt
If you’re living with excessive amounts of debt, you’re not alone. More than 43 percent of Americans currently owe more than they earn, and with credit card rates ranging anywhere between 10 and 30 percent, it’s no wonder the average person is carrying more than $5000 in credit card debt.
The Growing Trend of Rising Debt
An Ohio State University Study uncovered a startling trend in credit card debt: the younger you are, the more debt you’re likely to have. According to the study, people born between 1980 and 1984 have nearly $6,000 more credit card debt than their parents and more than $8,100 more than their grandparents.
What does this information tell us? Two things:
1.) Credit card debt is rising
2.) More and more people are spending more than they should, and hefty credit cards are one of the main culprits.
Tips for Dealing with Multiple Credit Cards
Having multiple credit cards isn’t unusual. You might use one credit card for emergency purchases, another for trips to the grocery store and yet another for your everyday purchases.
With each new account, however, it becomes more and more difficult to track and manage your bills. That’s why we’ve come up with a 3-step plan to help you determine which cards to pay off first.
1. Evaluate Your Interest Rates
If you’ve become burdened by your numerous credit cards and their resulting debts, don’t panic. Instead, start by looking at the interest rates of each of your credit cards. Since high-interest balances grow at a faster rate than low-interest balances, it’s usually a good idea to pay the high-interest ones off first. However, cards that have begun to accumulate penalty interest require particularly urgent action and should take priority over all others.
2. Look at Your Balances
If your interest rates are more or less the same, then another good rule of thumb may be to pay off the cards with larger balances before moving onto cards with more manageable debts. If you can devote a little more money each month to your cards with higher balances, you’ll help get your big debts out of the way first and make way for the smaller cards.
However, make an effort not to skip paying one card for another. Instead, aim to allocate more of your monthly spending to paying off the ones with higher interest rates. After all, large balances accumulate more interest than small balances.
3. Get Help from a Credit Counselor
Keeping on top of your debts can be hard, but you don’t have to tackle your credit card bills on your own. A credit counseling service can help you manage your debts and begin paying down your obligations in a controlled manner. Over time, you’ll be able to open up some breathing room in your budget.
Breaking the Cycle
A whopping 40% of families owe more than they make, which means more is going out than coming in. Not only are consumers taking on more debt, they’re taking longer to pay it off. With interest rates at an all-time high, taking longer to pay off your debt is simply adding to the problem.
The longer you spend in debt, the more you pay in interest, and the more you pay in interest, the more debt you have. It’s a vicious cycle, and it’s one that can only be broken with hard work, dedication, and a sincere want to get out of debt.
Make a Budget, Get Out of Debt
In addition to helping you tackle your debt, our credit counseling program also provides a variety of effective budget management tools, including credit management tips, household budgeting advice and other monetary management strategies to help you budget successfully.
If you’re struggling with credit card debt, give us a call at 1-800-500-6489, or fill out the form above to see how we can help you get out of debt.
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