What You Can Do to Finally Get Out of Credit Card Debt
Thanks to the significant challenges presented by the ongoing COVID-19 pandemic, more Americans than ever are struggling financially. With a lot of people out of work due to the staggering number of business closers, many are turning to credit cards to help make ends meet.
According to one recent study, total credit card balances in the United States ballooned to a massive $893 billion as of the first quarter in 2020. People with average or good credit scores ranging from 670 to 739 tend to carry the most debt, with an average of about $9,712 per card.
Thankfully, all hope is not lost. Even if you're currently carrying large balances, there are a number of steps you can take to find the relief that you seek – you just need to keep a few key things in mind along the way.
Getting Out of Credit Card Debt: One Step at a Time
By far, one of the best moves you can make to get out of credit card debt involves using a balance transfer card as strategically as possible. Yes, at this point you're just moving debt from one card to another - but if that balance transfer card doesn't charge interest for a specific length of time (think: six months to a year), you'll be able to continue making payments and still save a large amount of money every month.
Keep in mind, however, that most balance transfer cards charge a fee ranging between 3% and 5% of the total amount that you're transferring. If you're planning on using a balance transfer card to move $2,000, for example, this likely means that you'll have to pay up to $100 for the ability to do so. Be aware of these fees and plan accordingly if this is the move you're going to make.
Note, however, that you'll typically need a credit score of at least 670 in order to get approved for one of these cards with a 0% introductory interest rate. If yours isn't quite at that level yet, you'll likely want to explore other options.
Along the same lines, you could also look into a debt consolidation loan - which is a bit like a personal loan that you specifically use to pay off your credit card debts. Not only could you easily get a loan for a lower interest rate than you're currently paying with your credit cards, but you can also use the money to consolidate many different cards into a single loan. This means you'll also only have one monthly payment to manage, too.
Debt consolidation loans usually have set terms, which can be anywhere from 48 to 60 months. But the major benefit here is that you'll also have a simple, fixed and predictable payment amount that you're responsible for every month - thus making it easier to repay what you owe without stress.
Finally, a lot of people don't realize that you can actually try negotiating your credit card debt with a lot of the major financial lenders out there. Look on your latest statement to find the contact information for your credit card issuer and pick up the phone and give them a call. At the very least, you may be able to negotiate a lower interest rate, reduced monthly payments or both depending on your history with that particular company.
Depending on the situation, you could also try to negotiate what is called a debt settlement, which is when the credit card issuer accepts a single lump sum payment to settle all debts on the card. Note that this isn't always possible, but it certainly won't hurt to ask. The worst they can say is "no," at which point you're free to explore some of the other options on this list.
In the end, it's important to understand that while it is entirely possible to get out of credit card debt, the best thing to do would be to take steps to avoid this situation in the first place. Try to use your credit card the same way you would a debit card - meaning, don't use credit to make purchases that you can't really afford in the first place. If nothing else, try to only make purchases that you know you'll be able to pay off by the time your next statement rolls around. That way, you'll still get all the items you need, and you'll avoid significant interest charges as well.
Sign up for our newsletter.
Each month, we will send you a roundup of our latest blog content covering the tax and bookkeeping tips & insights you need to know.
We care about the protection of your data.
Junglebooks Affiliate Program
Why Partner with Us?
With years of experience and a team of certified professionals, we deliver exceptional results to our clients.
-
Industry-Leading Expertise
-
Our firm is a leader in the accounting industry, providing comprehensive services that include tax preparation, bookkeeping, financial planning, and business consulting. With years of experience and a team of certified professionals, we deliver exceptional results to our clients.
-
Attractive Commissions
-
We value our affiliates and offer competitive commission rates for every client you refer who signs up for our services. The more clients you refer, the more you earn.
-
Comprehensive Support
-
We provide our affiliates with all the resources needed to succeed, including marketing materials, dedicated support, and regular updates on our services. You’ll have everything you need to effectively promote our firm and earn commissions.
-
Trusted Reputation
-
Our firm has built a solid reputation for excellence and trustworthiness. When you refer clients to us, you can be confident that they will receive the highest level of service and satisfaction.
Frequently Asked Questions
-
This firm prepares tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Our firm’s seasoned professionals are experts in all areas of taxation including:
- Individual Returns
- Payroll Tax Issues
- Business Returns
- Sales Tax Returns
- Rental Income Returns
- Business Consultation
- Expatriate Returns
- Fiduciary & Estate Returns
- Corporation Returns
- Bookkeeping
- Partnership Returns
- LLC Returns
-
Our firm offers a full range of planning services including, but not limited to:
- Individual Tax Planning
- Business Tax Planning
- Business Organization
- Rental Properties
- Foreclosures and Repossessions
- Retirement
- Investments
- Sales and Exchanges
- Pension Plans
- Education Planning
- Finance & Refinance Planning
- Home Purchase and Sale Planning
-
We are here for you twelve months a year, not just during tax season. Whether you have a simple tax question, need advice on the tax implications of a business decision, or want clarification on a government notice, feel free to give us a call.
-
We maintain a policy of the strictest confidence concerning our clients’ affairs. You can rest assured that no one will learn about your business or tax status – even relatives, associates or friends who might have referred you to us.