4 Things You Can Do if You’re Drowning in Credit Card Debt

If you’re facing mountains of credit card debt, it can feel downright suffocating. Between the bills, letters, and phone calls from creditors, it’s all a bit too much to handle. But, thankfully, there are ways to get out of this mess.

Got Credit Card Debt?

If you’re facing a mountain of credit card debt, you aren’t alone. According to MoneyGeek.com, the average credit card holder in the U.S. has right around $5,668 in credit card debt. In total, Americans owe north of $787 billion in credit card debt. Total debt per capita is $53,897.

Credit card debt typically varies by age. Those under the age of 35 tend to have the lowest average credit card debt ($3,700), while those age 75 and older have the highest average credit card debt ($8,100). Interestingly, just 28 percent of people in this age group have debt, which means those who do typically have very high balances. Those in the 45 to 54 age bracket are most likely to carry credit card debt (52 percent).

Credit card debt also tends to correlate with income. High-earners tend to owe the most in credit card debt (an average of $12,600 for those in the 90-100 percentile compared to just $3,800 for those in the 1-20 percentile). However, when you look at the percentage of people who carry credit card debt, it’s most common among those in the 40-59 age bracket (55 percent) and the 60-79 age bracket (57 percent).

4 Steps You Can Take to Tackle Credit Card Debt

While credit card debt isn’t exactly uncommon, it’s also not something that you want in your life. Credit card debt complicates your financial life and is often a leading cause of stress, anxiety, and depression. Having said that, here are some steps you can take to tackle debt and move on with your life.

1. Create a Budget and Repayment Plan

The best thing you can do is evaluate your finances, create a budget, and create your own documented repayment plan. If you make a decent income and are willing to make a few temporary sacrifices in your lifestyle, this is usually feasible.

Start by tracking your income and expenses down the penny. Next, eliminate anything that isn’t an essential expense. Finally, take all extra monthly cash flow and use it to pay down debt. There are a variety of different strategies, including the “Snowball Method” and the “Debt Avalanche Method,” so you’ll have to decide which is right for you.

2. Work With Your Creditors

You might not realize that credit card companies are open to negotiations. And in many cases, they’re willing to take pennies on the dollar (depending on the amount of your debt and how far behind you are on your payments). You can either negotiate on your own or hire a third party agency to negotiate on your behalf.

3. File for Bankruptcy

While it might not be your first choice, filing for bankruptcy may be the best choice. It can strike out your credit card debt and allow you to start over fresh.

“With both Chapter 7 and Chapter 13 bankruptcy, you may be able to get rid of your credit card debt,” attorney Devin Sawdayi says. “With Chapter 7, your assets are liquidated and all remaining unsecured debt is discharged. With Chapter 13, your debt is reorganized and you’re required to make monthly payments for three to five years to pay back a portion of the debt you owe. Either way, bankruptcy means relief.”

Because it’s a major financial decision, bankruptcy shouldn’t be pursued without first obtaining legal counsel from an experienced bankruptcy attorney.

4. Strengthen Your Financial Habits

Regardless of whether you pay down your debt or seek relief via bankruptcy, it’s important that you proactively strengthen your financial habits moving forward. This is not something you want to go through again. By making smart financial decisions today, you can set yourself up for success tomorrow. It may require some sacrifice today, but the long-term benefits far outweigh any temporary discomfort you may experience.

Kiss Credit Card Debt Goodbye

Stop letting credit card debt rule your life. It’s time to tackle and eliminate your debt once and for all. Whether it’s by aggressively paying down the debt or filing for bankruptcy, you have options available to you. Now’s the time to fight backcre!