On Your Side: Managing credit card debt
BIRMINGHAM, Ala. (WBRC) - Do you have mounting credit card debt? You aren’t alone. Many people rely more on credit cards to pay off essentials. How can you manage that debt? We’re On Your Side with a few ways to get it under control.
“Our credit card debt was like probably $120k,” Rick LeClair said.
LeClair describing his mountain of credit card debt after combining finances with his wife.
“When they started sending me credit card offers, I was like ok, gimme gimme gimme., and I took them and just went crazy. I went absolutely crazy with credit cards and it was terrible,” LeClair said.
Right now, higher rates make it even harder to pay off your debt.
“On the rate side, the average credit card rate right now is 18.1% that’s the highest since 1996 and that’s all about the feds efforts fight inflation and the fact they have raised rates by two and a quarter points just since March,” Ted Rossman, a senior industry analyst with Bankrate.com said.
“If you have debt and you are struggling with it, my top tip is to get a zero percent balance transfer credit card,” Rossman added.
Rossman tells us these offers let you pause the interest clock for as long as 21 months allowing you to possibly save hundreds even thousands in interest. Another option to manage credit card debt is a low-rate personal loan. Nonprofit credit counseling is also a good option to help you get into a debt management plan. Rossman says managing credit card debt also comes down to the fundamentals.
“Earning more, spending less. Maybe taking on a side hustle, selling stuff you don’t need,” Rossman said.
LeClair took a more aggressive approach. He sold his home and downsized. He used the cash from the sale to pay off credit card balances.
“We still have the credit cards but I’m smarter with them now. I use it, I pay the balance. I use it, I pay the balance,” LeClair said.
Not a lot of us carry cash anymore, but that is another way to cut down on debt. It may seem like a no brainer but paying with cash prevents you from accumulating more debt and can help you spend less overall.
You can find more ways to manage credit card debt here: https://www.bankrate.com/finance/credit-cards/ways-to-pay-off-credit-card-debt/
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