If your credit cards are overwhelming, you’re like one of many other Americans struggling with credit debt. According to some of the latest data, the average American has around $5,331 in credit card debt.
Credit debt itself isn’t necessarily bad, but since around 55% of Americans don’t pay in full, they face late fees, high interest rates and other expensive consequences.
How does credit card debt change with income?
It may seem counterintuitive, but credit card debt tends to rise with income. The more someone has to spend, the more freely they tend to put items on credit believing that they can pay back what they owe. The debt-to-income ratio is more important, though. Someone with a $30,000-a-year salary will struggle more with $10,000 in debt than someone who earns $100,000 annually and has $10,000 in debt.
Don’t feel alone if you’re struggling with credit debt
You shouldn’t feel alone if you’re dealing with credit card debt, because around 83% of all Americans have at least one credit card. On average, they own three. With high interest rates, it’s not a surprise that many people find it hard to pay off what they owe.
What can you do to pay down your credit debt?
If you owe on debt, one of the best things you can do is to make sure you’re not paying the minimums each month. Sometimes, paying the minimum won’t even cover the interest on a high credit card bill.
If you cannot pay the minimums or aren’t able to pay more than you owe on at least one card, then you may want to look into other options such as debt consolidation or consumer bankruptcy. Debt consolidation, when done correctly, may help group all of your debt onto a single loan, so you make one payment (with hopefully less interest). Bankruptcy, on the other hand, may help you eliminate these debts completely without paying anything else towards them or with a structured repayment plan you can afford.
There are options if you’re struggling with debt. Look into your legal rights and responsibilities, so you can start moving forward with a plan to get past this temporary issue.