Deep into the first month of the New Year, you may be pausing to see how your resolutions are coming along. Have you joined the gym yet? Is that closet organized? Are you connected with old friends? How about your finances?
For many, the start of a new year is the ideal time to re-evaluate their finances and figure out how to manage their budgets. This often includes reducing spending, increasing savings and getting control of their debt. Some may find this process exhilarating and encouraging, but you may see it as a wakeup call.
Putting a plan into action
By making a commitment to pay down your credit card debt, you join many who make such resolutions. Last year, a survey showed that 64 percent of those who resolved to pay off debt accomplished their goals. Some ways in which they met the challenge include these:
- Cutting back on spending
- Earning extra money through gig work
- Developing a debt repayment plan
- Establishing an emergency fund
Of course, if you have maxed out your credit cards because of medical expenses, job loss or other factors out of your control, these actions, simple as they sound, may be entirely out of your reach. You may already be living as leanly as possible, and creating a fund for emergencies is difficult to do when every penny is already spoken for.
Solutions to overwhelming debt
If your household is like the average household in South Carolina and across the country, you carry $137, 063 in total debt. Most of that is probably your mortgage, but if it isn’t, you may be concerned about where you owe that money. In the typical family, about $15,654 of the total debt is from credit card spending. In fact, Americans owe $1.02 trillion in credit card debt, according to the most recent tally.
Credit card spending has its value. Many use credit cards to raise their credit scores to qualify to purchase homes. You can also reduce the expense of a credit card bill by paying it off quickly instead of accumulating interest, fees and penalties. However, if you are unable to make those quick payments, you pay dearly. Credit card debt is often the costliest debt to carry, and you may be among the many who readily admit it is a problem you are not able to tackle on your own.