There is no magic wand to *poof* away debt, and the typical U.S. household carries $6,829 in revolving credit card debt. However, by taking stock and managing your credit card balances thoughtfully, you can reduce your debt faster and cut down what you pay in interest and fees.
First, you’ll need to answer some important questions about your finances.
- How much unsecured debt do you have? The very first step in reducing your debt is understanding just how much you owe. Include credit card balances, medical debt, and personal loans. Can you see yourself paying it off in 5 years?
- What are your interest rates? You could save by consolidating debt to one card with a consistent low rate. Plus, making just one payment guards against missing a due date and getting dinged with a late fee. Consult one of our member service representatives for a free credit score review first to learn how this could affect your score, and how improving your credit score can in turn lower your interest rates.
- How did you accumulate the debt? If overspending is an issue, address this first. Otherwise, you’re just shifting debt around and you could end up owing even more. Once you’ve established that your debt is manageable and you’re committed to paying it off, contact us to help you plan. You’ll learn the best moves to reduce your debt and boost your credit score.
Next, work your plan until your debt is gone. Finally, stay committed to debt-free living by establishing an emergency savings account and planning ahead for known expenses.