It Could Take 14 Years To Pay Off Your Credit Card Debt If You Don’t Make Changes Now
How much credit card debt are you carrying? The average American has $3,600 in credit card debt. And even though a recent study found that “more than 60 percent of households carry no credit card debt whatsoever, and of those that do, many pay it in full every month,” Americans are still stressed out over their debt, mainly because interest rates are boosting the debts they do carry.
“Using data from the U.S. Census Bureau and the Federal Reserve, ValuePenguin found that the average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10 percent over the past three years. At the average variable credit card interest rate of 16.1 percent, this translates to nearly $2,600 in credit card interest alone. And many credit cards have interest rates much higher than the average,” reported USA Today.
With such debt it could take you a whopping 14 years to pay off your debt at the average interest rate and a minimum payment of 1.5 percent of the balance. That means $16,048 will cost you $40,200. “To be fair, it’s worth mentioning that not all of this credit card debt is the high-interest variety. Many people take advantage of 0 percent introductory APRs as a cheap way of consolidating debt or financing a big purchase. There is a big difference between $10,000 of credit card debt at 0 percent interest and $10,000 of debt at 20 percent interest,” reported USA Today.
And it seems that people in the worst financial shape are carrying the highest credit card debt. “Unfortunately, households with negative or zero net worth have the most credit card debt among all categories — and by a significant margin. The average negative- or zero-net-worth household carries credit card debt of $10,307. This is 27% more than the next highest group — households with net worth of $500,000 or more,” reported USA Today.
But there are things you can do if you are feeling hopeless about your credit card debt:
–This may sound like a no brainer, but just say “no” to using your cards. This will probably mean making some sacrifices, but it’s really the only way to stop accumulating more debt.
–“Take advantage of a 0 percent offer. Competition among credit card issuers has never been higher, which is a good thing for you. There are 0 percent introductory APR offers of up to 21 months in duration, and some even have no balance transfer fees. The Chase Slate and Citi Simplicity are two good ones to look at. This way, the money you’re paying will go toward paying down the principle, not the interest,” reported USA Today
–Call up your creditors and ask them for a lower interest rate. If you have been paying your bills on time, most likely they will try and work out a lower rate for you.
–Pay more the a minimum–a lot more.