The Federal Reserve Board reports that in August of 2015, Americans owed $918 billion on their credit cards. This was up $35 billion from a year ago, and up $79 billion from the previous five years. However, it’s still far from the all-time high of $1.04 trillion in December 2008. Credit card debt is disproportionately higher among men than among women. In fact, men in Alaska, Colorado, and Connecticut owe the most, while women in these states owe the least.
If you find yourself struggling with credit card debt, you have several options for getting control. You can put away your credit cards, enroll in debt management programs, or learn to stick to a budget. But whatever option you choose, remember that not paying off your debt will cost you money in the long run and ruin your credit.
Credit cards are wonderful tools for building your credit history and offering benefits, but their irresponsible use can leave you with a mountain of debt. Cutting your credit card debt requires finding extra money in your budget, lowering your interest rates, and following proven debt repayment strategies. Remember that you are in charge of your finances, and with persistence and hard work, you can conquer your credit card debt. Use the tips in this guide to help you get started.
According to the Federal Reserve Bank of New York, the total balance on U.S. credit cards is currently $887 billion, a $46 billion increase from the first quarter of this year. This represents a 13% increase year-over-year growth, and is the highest amount since at least the second quarter of 2001.
If you have credit card debt and want to get it under control, call your credit card issuer and ask for a lower interest rate. Always remember that you’re under no obligation to make the payments, but if you don’t, the credit card companies can sue you and your credit score may suffer. In addition to that, they can charge you additional fees and interest, which only increases your debt. By calling your credit card issuer, you should be able to negotiate a reduced interest rate and lower monthly payments.
If you’re struggling with credit card debt, the CFPB’s new initiative may be the answer. The agency plans to study anti-competitive practices in the credit card industry, including the use of rewards programs. However, it’s important to remember that the CFPB does not have the authority to cap interest rates, but it has used public pressure in the past to get companies to change their policies.
Debt settlement is another option that can be considered when you don’t have the money to pay off your entire debt. Credit card debt settlement is a process in which the lender agrees to forgive some of the debt in return for a large one-time payment. For example, a person who owes $10,000 on a credit card offers to pay only $5,000 and the credit card company agrees to erase the rest. This way, you can get out of debt and avoid the daily phone calls from creditors.