According to a new investigation conducted by financial resource GOBankingRates.
Additionally, the survey indicated that about 30% of respondents had between $1,001 and $5,000 in debt, and 15% said they had $5,001 or more in credit card debt. When it comes to paying back as well, many consumers are considering long-term plans to do so.
The majority of survey respondents (59%) said they would be able to pay off all of their credit card debt at some point in the next six months. However, 13% said it could take them up to two years, 8% said it would take them five years to do it, and 2% think they will never pay off their debt.
If you’re looking to tackle credit card debt, a credit monitoring service could help by providing alerts on late payments, fraudulent activity, credit score changes and more. Check out some of Credible’s partners here.
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Credit card debt could last for years
Another survey, produced by Inside 1031 out of 1,000 Americans who own at least one credit card, found that 40% of Americans had not been freed from credit card debt in the past four years and 15% had credit card debt since before 2006.
It comes as many Americans use credit cards to cover essential living expenses, the survey found. About 61% of Gen Z Americans and 53% of Millennials said they use their credit cards to cover these costs, compared to just 26% of baby boomers.
Additionally, credit card expert Ted Rossman said in an interview with FOX Business that by the middle of 2022, credit card debt could reach an all-time high, adding that he was not surprised. .
“Really, the only thing that’s a bit surprising is how quickly it happens. We’ve seen this movie before during and shortly after a recession, and credit card debt goes down, and then it goes up and set new records,” he said.
If you’re looking for a way to consolidate your credit card debt, consider taking out a personal loan at a lower interest rate. You can use Credible’s personal loan payment calculator to determine your new monthly payments and potential savings.
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How to pay off debt quickly
Some strategies for getting out of debt include paying more than the minimum payment on each card, paying off the debt with a higher interest rate first, and saving money to cover unexpected expenses. However, there are several ways consumers can quickly pay off their debt by tightening up their purchases and avoiding the use of credit cards:
Take out a debt consolidation loan
Personal loan interest rates are near record lows, and generally have significantly lower interest rates than credit cards. By taking out a personal loan to pay off their debts, consumers have access to the funds they need and can either lower their monthly payments or pay more money for the principal balance owed. Visit Credible to apply for a new personal loan in minutes.
Reduce monthly expenses
Consumers can consider creating a budget to determine where their spending is going and reduce overspending or even monthly subscriptions. They can also lower their monthly payments, such as student loans, by refinancing when interest rates are low. This extra money can be applied to debt repayment.
Use a credit card with balance transfer
Balance transfer cards typically offer 0% interest rates for a selected period of time – usually around six to eighteen months – on any new balance transferred. During this time, the debt will not generate any new interest and users will be able to pay off the debt faster, since even the minimum monthly payment will go entirely to the debt owed instead of the interest.
If you want to review your credit card options, including a balance transfer credit card, visit Credible, where you can compare them side by side.
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.