Consumer debt is at an all time high in our country. Many people are in the mode of “putting it on the card” without considering how they will pay it back. On top of that, most credit cards carry high interest rates, so the debt often builds up faster than people are paying it back.
Consider the following— According to Lending Tree:
- Americans owe $807 billion across almost 506 million credit cards
- Median debt for American families is $2,700, while average debt stands at $6,207
- 45.4% of families carry some sort of credit card debt
- The West holds the highest average credit card debt — averaging over $7,000
- Average credit card interest rates are between 15.6% and 23.02%
As a result of these statistics, reducing and eliminating credit card debt becomes a challenge for many — but it is a challenge that must be addressed. But how? Here are a couple of approaches:
- If you are just getting started with debt elimination, you may need to build your confidence to eliminate debt. If this is the case, a good approach is to take the credit card with the lowest balance — regardless of interest rate — and pay that off as quickly as you can. Doing so will help you build the confidence to take on bigger challenges.
- If you already have both the confidence and determination to pay off debt, then look at which card is costing you the most (a combination of debt owed and the card interest rate), and tackle that one first. When that card is paid off, do the same thing with the next card, and so on.
Eliminating consumer debt can take a bit of time, but it is doable if you make a decision to pay it off and then back that decision with action to make payments every — single — month.