How to get help with your credit card debt, according to experts (2024)

We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms.

MoneyWatch: Managing Your Money

By Dori Zinn

Edited By Angelica Leicht

/ CBS News

How to get help with your credit card debt, according to experts (2)

With the costs rising for nearly everything due to high and persistent inflation, it's no surprise that many Americans are turning to credit cards to help pay for essentials. But while this approach can help fill in the gaps in your budget, it comes at a hefty price.

According to the Federal Reserve Bank of New York, Americans currently collectively owe $1.12 trillion in credit card debt — more than 13% compared to one year ago. And, the average American now owes almost $8,000 in credit card debtdespite annual percentage rates (APRs) on credit cards having almost doubled in the last decade. The average credit card rate is now close to 23%.

These factors can make credit card debt hard to tackle. And, some cardholders are facing even higher credit card balances than the average, so it's important to know how to get help with this type of debt if and when you need it.

Find out how the right debt relief program can help you today.

Here's how experts say you can manage your credit card debt — and where you can get help if you need it.

Take a realistic look at all of your debt

One of the hardest parts of facing your credit card journey is looking at the mountain of credit card debt you've accrued. But, it's also one of the first steps in managing it.

"Assess the full scope of the issue using each credit card's most recent monthly statements," says Markia Brown, accredited financial counselor and founder of The Money Plug. "These statements will give you the current balance owed and the assessed interest rate for each account. This information can help you identify which debt paydown strategy is best for you."

While your statements are an important place to look, they aren't the only place. Martin Lynch, president of the Financial Counseling Association of America (FCAA), says you should also take a look at your budget to make sure it's up-to-date.

"Make sure all of your income and expenses are accurately reflected, then prioritize those expenses to identify areas where temporary reductions can be made," Lynch says. "The key to the process is a flexible mindset. Recognizing that you can control your expenses by making temporary, beneficial changes can be very empowering."

Ready to tackle your credit card debt? Compare your options online here.

Craft a repayment plan for a DIY approach

If you want to take the do-it-yourself (DIY) approach, there are a few different ways to tackle credit card repayments on your own, including the debt snowball and debt avalanche methods.

For both methods, you'll list all outstanding credit card debt, including how much you owe, the minimum monthly payment, the interest rate and the due date. You can do this on a spreadsheet or write it out by hand — whatever works best for you.

Debt snowball

The debt snowball method is when you make minimum payments on all of your outstanding debt and then put all of your extra cash toward the credit card with the smallest balance. You'll do this every month until the smallest debt is paid off in full. Then you'll move onto the next-smallest debt and continue until you've paid off all your credit cards.

Debt avalanche

Instead of focusing on the smallest debt first, the debt avalanche method prioritizes the debt with the highest interest rate or the largest balance. You'll make minimum payments on all your outstanding debt and put any extra cash towards the credit card with the highest balance or interest rate. Do this until your card is paid in full and then move onto the card with the next-highest interest rate or balance and continue until all your cards are paid in full.

Try to settle old debts and delinquent accounts

You may also want to pull your credit report for free at AnnualCreditReport.org and see if there are any delinquent accounts listed on your report. If there are, be sure to check and make sure those accounts are actually yours. If they aren't, you can report inaccurate and fraudulent accounts. But if they are yours, you may want to take some steps to negotiate those old debts.

"Some debt collectors will allow you to set up a payment arrangement, and some will even settle for less than what is owed," Brown says. "Whichever option you choose, make sure to get a written agreement signed by an agent of the company for your records."

If the delinquent debt is old, there's a chance your debt has already moved into collections. If that's the case, you can reach out to them to see what your options are. You can find that contact information on your credit report.

"For most consumers whose debt has recently moved to collections, don't settle the debt, and don't promise more than you can actually afford to pay," Lynch says.

Get professional help when you need it

For some people, tackling credit card debt requires a little bit of extra help from professionals. For example, some non-profits, like the FCAA, will offer free credit counseling to those who need it.

"If you're maxing out your accounts and your high interest rates are breaking your budget, let our counselor lay out your options and give you the space to ask questions until you're satisfied," Lynch says. "We'll even create an action plan with you that's free."

Some borrowers might need tailored assistance through a debt relief company, like a debt management program, instead. These plans allow debt relief agencies to negotiate on your behalf to lower your interest rates or outstanding payments.

There are other options too, like debt settlement programs, in which the debt relief company negotiates lower payment amounts on your credit card balances to settle what you owe. The rest of the debt is then "forgiven" by the creditor or the debt collector it was sold to.

But while these programs can be helpful in many cases, you'll have to pay a fee for this service. And that fee can vary widely based on the company you work with.

You don't have to work with a debt relief agency to get this type of relief, though. In some cases, you might be able to do it on your own. But if you do go the route of finding outside assistance, make sure you screen companies beforehand and keep an eye out for any red flags that could signal a scam.

How to get help with your credit card debt, according to experts (2024)

FAQs

What is the best advice for clearing credit card debt? ›

How to pay off credit cards in 7 steps
  1. Stop using your credit cards. ...
  2. Get a realistic fix on your debt. ...
  3. Begin the month with a budget. ...
  4. Make timely payments. ...
  5. Make more than minimum payments. ...
  6. Focus on cards with low balances or higher interest rates first. ...
  7. Request rate reductions.

Who is the best person to talk to about credit card debt? ›

Talk to a nonprofit debt counseling company about a debt management plan that allows you to pay your credit cards in full, but at a reduced interest rate, or with fees waived, or both.

How to get rid of credit card debt you can't afford? ›

Here are a few steps you can take to get your credit card bills under control.
  1. Add up your income and expenses. Look for ways to cut costs. ...
  2. Call your credit card company. When you talk to your credit card company, be sure to clearly explain: ...
  3. Consider credit counseling. ...
  4. Watch out for debt settlement or debt relief companies.
May 15, 2024

Is the government helping with credit card debt? ›

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief. In fact, if you receive a solicitation that touts a government program to get you out of debt, you may want to think twice about working with that company.

What is the fastest way to get out of credit card debt? ›

How to pay off credit card debt fast
  1. In a nutshell. ...
  2. 4 ways to pay down debt fast. ...
  3. Use a popular debt repayment strategy. ...
  4. Apply for a debt consolidation loan. ...
  5. Consider a balance transfer credit card. ...
  6. Use a debt relief program.
May 13, 2024

How can I clear my credit card debt legally? ›

Filing for Chapter 7 bankruptcy wipes out unsecured debt such as credit cards, while Chapter 13 bankruptcy lets you restructure debts into a payment plan over 3 to 5 years and may be best if you have assets you want to retain.

Is national debt relief legitimate? ›

Is National Debt Relief legit? National Debt Relief is an accredited member of the American Association for Debt Resolution (AADR). It has been around since 2009 and has helped over 600,000 individuals reduce their debt. It also has an A+ rating from the BBB (Better Business Bureau).

Is it worth doing a debt relief program? ›

Debt relief will also often give you a fixed payment plan and a set payoff date, which can also make it worth considering — as streamlining your payments can make it easier to manage while helping you save money on interest. "One of the biggest advantages of going through a debt relief program is the savings.

How can the elderly stop paying credit cards debts? ›

Option Two: File a Chapter 7 bankruptcy. The “upside” of proceeding in this fashion is that your Chapter 7 Trustee will not be able to reach your assets either, and the stress associated with harassing phone calls and other collection activities will stop immediately upon the filing of your bankruptcy petition.

How to pay off debt when you have no money? ›

How to get out of debt when you have no money
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Dec 5, 2023

How do you clear debt you can't afford? ›

Another option is an Individual Voluntary Arrangement (IVA). Under an IVA you make smaller payments over several years and then the rest of the debt is written off. Full bankruptcy, which is also usually completed within a year, can result in you having to sell assets such as a house or car to pay your debts.

How can I legally avoid paying credit card debt? ›

Outside of bankruptcy or debt settlement, there are really no other ways to completely wipe away credit card debt without paying. Making minimum payments and slowly chipping away at the balance is the norm for most people in debt, and that may be the best option in many situations.

Will there be credit card forgiveness? ›

The only way credit card companies are likely to forgive the full amount of your balances is if you file bankruptcy. However, there are other ways to get out of debt in a reasonable amount of time. For example, you may be able to have a portion of your credit card balances forgiven with a debt settlement program.

What is the National debt relief Hardship Program? ›

National Debt Relief, a debt settlement firm, negotiates with creditors to reduce consumer debt. They offer free consultations and will customize plans to make debt payoff affordable. Depending on factors like your debt size, budget and negotiated amount, you could pay off your debts within 24 to 48 months.

Does the government give out $9000 dollar grants? ›

The government does not offer "free money" for individuals. Federal grants are typically only for states and organizations.

What is the best way to cancel credit card debt? ›

Here are several techniques for paying off credit card debt the smart way:
  1. Try the avalanche method. ...
  2. Test the snowball method. ...
  3. Consider a balance transfer credit card. ...
  4. Get your spending under control. ...
  5. Grow your emergency fund. ...
  6. Switch to cash. ...
  7. Explore debt consolidation loans.
Jun 12, 2024

How do I clear my credit card debt? ›

Options for paying off your credit card balance include:
  1. Making a budget. Find out if you can make savings anywhere. This will: Free up money to increase your credit card repayments. ...
  2. Transfer the balance. Find a zero percent interest credit card and make regular payments to pay this off.
  3. Take out a consolidation loan.

How long will it take to pay off $20,000 in credit card debt? ›

It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

What are the three biggest strategies for paying down debt? ›

Strategies to prioritize your debt payments
  • Prioritizing debt by interest rate. This repayment strategy, sometimes called the avalanche method, prioritizes your debts from the highest interest rate to the lowest. ...
  • Prioritizing debt by balance size. ...
  • Consolidating debt into one payment.

References

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Fr. Dewey Fisher

Last Updated:

Views: 5462

Rating: 4.1 / 5 (62 voted)

Reviews: 93% of readers found this page helpful

Author information

Name: Fr. Dewey Fisher

Birthday: 1993-03-26

Address: 917 Hyun Views, Rogahnmouth, KY 91013-8827

Phone: +5938540192553

Job: Administration Developer

Hobby: Embroidery, Horseback riding, Juggling, Urban exploration, Skiing, Cycling, Handball

Introduction: My name is Fr. Dewey Fisher, I am a powerful, open, faithful, combative, spotless, faithful, fair person who loves writing and wants to share my knowledge and understanding with you.