What to do if your credit card debt increases

With rampant inflation and pandemic government aid now a relic of the past, more and more people are turning to credit cards to pay their bills.

A total of 48% of cardholders report not paying their credit card bills each month, according to a survey conducted for the CreditCards.com information service by YouGov.

And 60% of those people owe their creditors for at least 12 months, up from 50% a year ago.

In addition, 40% of debtors report having credit card debt for at least two years, 28% for at least three years and 19% for at least five years. Another 8% say they don’t even know how long they’ve had credit card debt.

Obviously, you want to avoid credit card debt as much as possible. With high credit card interest rates, you can quickly incur substantial liabilities. And if you’re only making minimum payments each month, you’re really in trouble.

Minimum payments mean big debt

“If you have the average credit card balance ($5,270 according to TransUnion) and only make minimum payments at the average interest rate of 18.17%, you will be in debt for more than 16 years. and end up paying a grand total of $11,875,” said Ted Rossman, senior industry analyst for CreditCards.com.

“It helps illustrate why it’s so important to pay way more than the minimum.”

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A total of 46% of cardholders with debt said they had to do so to cover emergencies and unexpected expenses, with 11% saying it was for medical bills.

Meanwhile, 24% of credit card debtors said they went into debt to pay for day-to-day expenses, such as groceries, childcare and utilities.

“Even though Americans’ total credit card balances are down 4% from the end of 2019, according to the Federal Reserve Bank of New York, our data is further evidence of the K-shaped economy. “Rossman said. “While many people are better, unfortunately many others are worse.”

Tips for reducing debt

So how can you reduce your credit card balance?

Rossman recommends increasing your income if you can. It could mean taking a second job or picking up a side hustle. Or it could mean selling goods you don’t need. I hope you also find a way to reduce your expenses.

“It’s easy to get into credit card debt and hard to get out of it,” Rossman said. “High inflation and rising interest rates make it even more difficult to release.”

If you find yourself mired in credit card debt, “my best advice is to sign up for a zero percent balance transfer card,” Rosman said. “These promotions last up to 21 months. Low-rate personal loans and nonprofit credit counseling can also be helpful debt repayment strategies.