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Americans are, unfortunately, no stranger to credit card debtAnd a new report from the Federal Reserve Bank of New York shows how quickly these problems are getting worse. According to the report, total credit card debt nationwide hit a record $1.14 trillion in the second quarter of 2024, an increase of about $27 billion from just a year ago. That’s a nearly 6% increase year over year.
Adding to the concern is a rising tide of delinquency Among cardholders. According to the report, approximately 7.18% of credit card users fell behind on their payments in the second quarter of 2024, an increase of more than 2% from the previous quarter. This increase in delinquencies indicates that a growing number of cardholders are struggling to keep up with their payments at a time when the average rate of the cards fluctuates around 24%.
If you’ve seen your credit card balance increase recently, or you’re one of the many people who unable to follow With your credit card payments, it is important to take steps now to get rid of your credit card debt. And while it may seem difficult, there are some simple ways to achieve this.
Want to learn more about your debt relief options? Learn more here.
How to Get Rid of Your Credit Card Debt Now
The following strategies may help you eliminate your credit card debt more easily:
Negotiate with your credit card company
One of the simplest approaches to dealing with your debt is to Start a dialogue with your credit card issuer. Many companies are willing to work with cardholders to find mutually beneficial solutions, such as lowering your interest rate or fees. While this may not seem like a huge relief, remember that even a small reduction in your interest rate can add up to significant savings over time.
When you contact your card issuer, be prepared to explain your financial situation. And if you have a good payment history, use that as leverage in the conversation. You might be surprised by what your issuer is willing to offer you, especially if they think it will help you stay a customer and avoid default.
Talk to a debt relief expert and start tackling your high-rate card debt today.
Consider a debt forgiveness program
For those struggling with significant debt, a credit card debt forgiveness (or a debt settlement program) might be worth exploring. These programs work by negotiating with your creditors to try to get them to accept a lump sum payment it is less than the total amount due. The remaining amount of your balance is then “cancelled”.
This can bring relief of crushing debt, but it is important to approach this option with caution. Debt cancellation can have consequences for your credit rating and may have tax implications. Not all creditors are willing to negotiate either.
If you are considering this path, it may be wise to work with a reputable debt relief companyNot only do debt relief companies employ skilled negotiation experts, they can also help you better understand the risks and rewards.
Consolidate your debts
By consolidate your debtsThe goal is to consolidate multiple debts into one, more manageable payment, often at a lower interest rate. This saves you money on interest, allowing you to focus on paying down the principal faster.
There is several ways to consolidate debtincluding debt consolidation loans offered by banks or credit unions. Or, if you are a homeowner, you may be able to leverage your home equity to get a home equity loan with a lower interest rate.
Another option is a debt consolidation program through a debt relief company. With this option, the money is borrowed from a lender that is a partner of the debt relief company. In return, the borrower’s requirements may be less stringent, as these companies are well-versed in working with borrowers who have high debt-to-income ratios or other credit issues.
Use a debt management program
A debt management program This is a structured repayment plan offered by credit counseling agencies. When you enroll in this type of program, the credit counseling agency works with your creditors to lower interest rates and possibly waive some fees. You then make a single monthly payment to the agency, which distributes the funds to your creditors.
These programs typically last three to five years and can be a great option for those who need help but don’t want to take more drastic measures. You’ll typically need to close your credit card accounts as part of program requirements, which may have a temporary impact your credit ratingbut the long-term benefits often outweigh this short-term disadvantage.
The essential
In today’s economy, eliminating credit card debt is especially important. Not only are rates high, but inflation and other economic obstacles could make it increasingly difficult to pay off your debt. Fortunately, there are several debt relief strategies to choose from. Find the one that best fits your situation. That way, you can regain control of your finances and work toward a debt-free future.
