Consolidated Credit launches campaign to help Americans downsize their credit card debt this Labor Day.
When you get into trouble with credit card debt, it can take over and run roughshod over your financial outlook. It takes away your financial control and starts to make the rules when it comes to your budget, but this is no way to work if you want to reach your financial goals.
With that in mind, Consolidated Credit has launched a new campaign this Labor Day that urges Americans to downsize credit card debt and show it whose boss.
According to NerdWallet, the average American household owes $15,191 in credit card debt. If you combine that with statistics from CreditCards.com that show the average APR of 15.01 percent, you can start to see the issue…
- On a standard minimum payment schedule of 2 percent of the balance at 15.01% APR, the minimum payments would start around $303.
- It would take 40 years (480 months) to pay off the debt if you made only minimum payments.
- During that time, you’d pay $24.546.06 in added interest charges (i.e. not including the original debt).
- So for $15,191 in credit card debt, you’d pay $39,737.06 over the life of the debt.
That’s right – added interest would more than double your debt before it gets paid off.
The value of paying more
Still, it doesn’t have to be that bad. There are strategies you can put in place to take control and put debt in its place.
- If you committed to paying an extra $20 on every monthly payment you make (added on top of the minimum payment amount), you’d be out of debt 235 months (a little less than 20 years) sooner and you’d save $7,646.95 in interest charges.
- If you fixed your monthly payments at $350 and paid that amount every month until the debt was paid, you’d be out of debt in 63 months (5 years, 3 months) and save $17,695.17.
So it’s worth it to develop your own action plan that helps you downsize your debt as quickly as possible. You can use a debt calculator to develop a strategy that works for your budget.
Find another workaround
If over five years still seems like too much time to be paying off credit card debt, then it’s time to look into alternative payoff options. These include different options for debt consolidation, as well as a debt management program through a credit counseling agency if your credit isn’t strong enough to qualify for DIY debt consolidation options on your own.
The aim of consolidation is to lower your interest rates and create a payment schedule that allows you to pay off debt faster than you could using traditional means. Since the interest is less, you can usually get out of debt faster even though you pay less each month because more of every payment goes to eliminating the principal debt.
If you’re struggling with credit card debt and you need help, call us to talk to a certified credit counselor. Your counselor can help evaluate your situation and weigh your options at no cost. If you’re ready to become your own financial boss again, give us a call at or request help online now.