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What To Do About Your Rising Credit Card Debt

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Assuming you are a person who follows current trends, then it is likely that you are increasing the amount of credit card debt you have.

During the early stages of the Covid-19 pandemic, credit card debt dropped as people spent only on essentials, did nothing outside of their home, and binge-watched every show available to them on their current streaming subscriptions.

But, as the world attempts to return to some semblance of normal life, consumers have increased their credit card spending, in some cases to the point that their amount of debt is higher than it was pre-pandemic.

The Federal Reserve reported in late September that 42 percent of consumers have more credit card debt now than they had before the pandemic struck. The second quarter of 2021 saw the highest rate of increase among outstanding consumer credit in the past five years, and the month of June saw an almost 11 percent increase as considered for an annual rate.

The reasons for this increased spending are unclear; there are still many restrictions on movement around the globe, but consumers are trying to return to normal and spending money they don’t have to get there.

If your level of credit card debt is swallowing you up and preventing you from moving forward financially, here are some suggestions as to how to attack the problem:

Stop Spending

The first step to decreasing your credit card debt is to stop adding to it. You have been binging financially lately, and it is time to take stock. Give yourself a spending freeze. You have all of the fun items you need to get you through the winter months. Go back to binge-watching TV shows and movies. You are already spending money on those subscriptions. Use them.

Increase your income

It takes time to spend money, and if you are serious about reducing your debt, you will stop spending time spending money. So what will you do with all of that time?

Get an additional source of income. We live in a gig economy these days. Freelancing and gig work is so plentiful that many people are living successfully today without any full-time employment. You can add one freelance gig or remote job that won’t upset your current career path and will add enough cash that it can be put directly to pay off your credit card debt.

There are also dozens of marketplace websites that will help you sell some of that stuff you bought that you don’t need. Then, when you sell any of those items, make sure that money goes to pay off credit card payments, not to another purchase.   

Make a list, check it twice

Write down all of the revolving credit cards you have, list the balances you are carrying, and determine the average annual percentage rate of interest you are being charged. 

Once you have all of that information written down and you can see it plain on a piece of paper or on your laptop, you can see where you are spending too much money in interest, and you can then do something about it.

Doing something about it

Pay off the cards with the highest percentage interest rates. Find a 0% balance transfer deal now being offered by reputable credit card companies in an attempt to help the economic recovery of the nation and the world. These balance transfer sometimes offers only apply to consumers with a credit score of 700 or better. Determine your credit score by visiting freescore360credit sesameor any other credit score services. 

Then, while not adding to your debt with any other credit cards, determine how much you can pay to the new balance. That balance transfer is effectively a 0% loan, but it is on a timed basis. You only have so many months to pay that off before a new, much higher interest rate is attached to your new card balance. Do the math.

Get Help

The problem with those 0% transfers is that they allow you to sign up for a new credit card that will seem attractive to you because it does not currently carry an interest fee. But it will, over time.

There are non-profit credit counseling services which will NOT provide you with a 0% balance transfer. Instead, they will assist you in consolidating all of your balances, find a lower-loan interest rate to pay off all of your balances so that you only have one debt to pay, making it easier to make payments and live on a balanced budget. 

There may be such a service near you. Search “non-profit credit counseling services” to see what is available. The National Foundation for Credit Counseling can help you remotely.

Get Serious

You are in a mess financially, but there are ways out as long as you take your problem seriously.

The advice is simple: get more money, spend less money, pay off your high-interest rate debts. You can do all three of those things if you want. 

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"The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind."

T.T. Munger

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