Debt is no joke, and while it is often discussed in a casual manner, the fact is that debt can be incredibly burdensome on a person’s way of life. If you have debt hanging over your head in one form or another then you may be familiar with the feeling that you’ll never be free of it. But that is not the case, and letting it get the best of you is not the way to approach it.
First of all, it is important to note that you are not alone. According to NerdWallet, the average amount of credit card debt in America is currently $17,956 per household.1 But this is only pertaining to credit cards. Mortgages and student loans are large culprits in the debt world, with the average mortgage debt being $156,584 and student loans about $33,090.
Overall, average credit card debt has dropped steadily since 2006, when the average household debt in the U.S. was $16,373. Even though improvement is good, it is still difficult to imagine so many people struggling to pay off their credit card debts. Additionally, though credit card debt ranks third on the list, and is considerably lower than mortgages and student loans, it does not mean it is less significant.
Credit card debt affects your credit score more substantially and quicker than mortgages or student loans, so while the amount of debt may be smaller, it is extremely important to properly manage credit card debt. Don’t be fooled – debt is debt, but some forms hit harder than others.
3 ways to pay it down
Don’t just fret about it. There are steps you can take to eliminating your debt and preventing it from impacting you. Take some of these steps below to put yourself in control. Paying down your debt quickly can be difficult, so being in control of it is what ultimately counts. Essentially, having debt is not the problem, it’s how you approach it.
Review your budget:
If you don’t already have a budget in place, then it is time to establish one. Instead of creating a budget that includes all the items you want, consider only including those items that you need, because paying down your debt is definitely something you need to do. According to Credit Karma, it is easy to become discouraged2 when you begin factoring debt obligations into your monthly budget, but again, it’s all about how you approach it. By creating a realistic budget and sticking to it, you will be taking control of your debt, and that is what matters.
Organize your debt:
If your debt is spread across multiple cards then it can be difficult to manage. Even if the amounts aren’t large, having them dispersed can make your repayment process more confusing and therefore, less efficient. If this is a problem you have, then perhaps you should consider consolidating your debts. While this option is not for everyone, it might be right for you. Consolidation of debts is simply lumping all of your debt into one monthly payment. According to Consumer Finance, there is often an interest rate affiliated with doing so, but it might be worth it if it helps you get your debt repayment process under control.3 Speak with your lender or financial advisor before taking this approach to see if your situation is right for debt consolidation.
Ask for help:
Many creditors, whether credit card companies or lenders, have repayment options in place to assist you. If after completing your budget you find that it is going to be very difficult to make monthly payments and still stay afloat, then perhaps you should give your creditors a call and speak with them about options. While there is no guarantee you can change your plan, you might be surprised how willing lenders are to accommodate. According to NOLO legal encyclopedia, this is a common practice and one that you should seriously consider if your debt is getting the best of you.
These are just a few ways that you can get your debt under control. At the end of the day, what it comes down to is approaching it seriously and not letting it get the best of you. The minute you begin to feel overwhelmed with debt, take a deep breath, and start from the beginning. Know that you aren’t in this boat alone, and that there is more than one way out.
The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®.
1El Issa, Erin. (2023, Jan 10). Retrieved from: https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household
2Lockert, Melanie. (2016, Oct 17). Retrieved from: https://www.creditkarma.com/advice/i/how-to-overcome-debt-fatigue
3Consumer Financial Protection Bureau. Retrieved from: https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-if-im-thinking-about-consolidating-my-credit-card-debt-en-1861/