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Credit card debt is climbing. Here’s how to get rid of yours now.
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Credit card debt has been surging nationwide, with revolving debt, which includes credit cards, growing at a troubling annual rate of 9.4% in July, according to data released this month by the Federal Reserve. The total amount of credit card debt nationwide has also been increasing, with balances recently hitting a record high of $1.14 trillion. This comes at a time when serious payment delinquencies are also on the rise and about 20% of credit card users are maxed out.
Further compounding the issue is the skyrocketing cost of credit card debt. Average credit card interest rates are currently sitting at a record high of nearly 23%, so many cardholders are seeing their balances grow faster than they can pay them down. This combination of rising balances and steep interest rates has created a double bind for consumers, many of whom are feeling squeezed by shrinking disposable income and higher living costs.
Given today’s financial pressures, it’s important to start taking immediate action to eliminate your credit card debt. Luckily, there are several strategies available that can help you tackle your debt head-on.
Feeling overwhelmed by your growing card debt? Find out what solutions are available to you here.
How to get rid of your climbing credit card debt now
Here are some of the most effective ways to get rid of your credit card debt.
Debt consolidation
Debt consolidation involves rolling multiple debts into a new loan, whether through a debt consolidation loan or another type of loan. The key benefit of this strategy is that it typically results in a lower interest rate than what you’re currently paying on your credit cards, saving you money on the cost of your card debt.
By consolidating your debt, you’ll have a single payment obligation each month instead of juggling multiple cards with varying rates and due dates. This strategy is particularly helpful if you’re someone who has high balances across several cards and find it difficult to keep track of your payments.
Debt consolidation is generally best for those who have decent credit scores, as qualifying for a loan with a favorable rate requires good credit. If you take this route, though, it’s essential to avoid racking up new credit card debt after consolidating. Otherwise, you could end up deeper in debt than when you started.
Learn more about your top debt relief options online now.
Balance transfer
Another option to consider is transferring your existing balance to a credit card with a lower or 0% introductory interest rate. Balance transfer cards offer an interest-free period (often 12 to 18 months), which can help you focus on paying down the principal balance rather than accumulating more interest. This strategy typically works best for those who have a solid repayment plan and can eliminate most, if not all, of their debt before the promotional period ends.
Keep in mind that balance transfer cards often charge a transfer fee (typically 3% to 5% of the transferred amount), so it’s important to factor in that cost. You also generally need a strong credit score and a solid budget to qualify for the best rates.
Debt settlement
Debt relief programs such as debt settlement, also known as debt forgiveness, are another pathway to consider for those with overwhelming credit card debt. When you pursue debt settlement, the debt relief company you work with negotiates with your creditors to try and reduce the total amount you owe.
These programs are generally best for people who are deeply in debt and may not be able to repay the full amount they owe. It’s worth noting, though, that while these options can save you money, there can be downsides, as not all creditors will agree to the terms and your credit can take a significant hit in the process.
Debt management plans
A debt management plan is a structured repayment option that is typically offered through credit counseling agencies. These plans consolidate your unsecured debts into one monthly payment and can come with lower interest rates or waived fees. This can simplify your repayment process and reduce the amount you owe in interest over time.
This option works well for those who need help budgeting and are looking for a long-term solution to pay down their debt, as these programs typically take between three and five years to complete. They may not be as ideal for those who want a quick fix or have enough savings to pay down their debt faster.
Creditor negotiations
If you’ve been a reliable customer in the past, another viable option is negotiating directly with your creditors to lower your interest rate or extend your payment terms. Many creditors would rather work with you to find a solution than risk you defaulting on your debt entirely. This can be as simple as asking for a reduced interest rate or requesting an extended payment plan.
This strategy is particularly effective for people who are facing temporary financial hardship but can meet their obligations with more favorable terms. Note, though, that it’s important to be proactive in negotiating before you start missing payments to preserve your credit score.
The bottom line
Watching your credit card debt compound can be stressful, but there are ways to resolve the issue. By taking action now, whether through consolidation, a balance transfer or simple negotiation tactics, you can get ahead of the growing credit card debt crisis and regain control of your financial future. The longer you wait, though, the more difficult it could be to break free.
Certain boxes of waffles sold at Costco Wholesale stores in the Midwest are being recalled because they may contain plastic, according to a notice by supplier Kodiak Cakes.
The recall involves Kodiak Power Waffles Buttermilk & Vanilla 40 count with the UPC code 705599019203 and a use-by date of Jan. 10, 2026, and only impacts products with the lot code 24193-WL4 and a time stamp of 12:00-23:00, according to the Park City, Utah-based company.
The recalled products were sold at Costco warehouses in 13 states: Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
The action was initiated “due to the potential presence of soft plastic film,” according to Kodiak, which noted that no injuries or illnesses had been reported.
Those who purchased the recalled product can return it to their local Costco for a refund.
People with questions can email Kodiak at: flapjacks@kodiakcakes.com or call 801-328-4067. Messages will be returned between 8 a.m. and 5 p.m. Mountain time, Monday through Friday.
Tyson Foods is misleading shoppers and investors over its ability to reach “net-zero” carbon emissions by 2050 as well take other steps aimed at protecting the environment.
Tyson, the world’s second-biggest meat processor, should have to curtail its climate claims or release a substantial plan to support its claims, according to a lawsuit filed on Wednesday by the Environmental Working Group. The complaint is part of an effort to “hold the biggest, most powerful contributors to the climate crisis — across industries — accountable for greenwashing,” EWG stated.
Tyson Foods has said since 2021 that it would hit net-zero emissions — the point at which the amount of greenhouse gases a company emits is offset by the emissions that are removed from the atmosphere — by 2050 by using more renewable energy and no longer contributing to deforestation.
The Arkansas-based meat company also sells a brand of “climate-friendly” beef that Tyson says is made with 10% fewer emissions than conventional meat.
A spokesperson said Tyson does not comment on litigation, but defended the company’s “long history of sustainable practices.”
The suit against Tyson was filed in Washington, D.C., which has a consumer protection law in place that lets consumer groups sue companies for false advertising.
The same claim of greenwashing — a term attributed to environmentalist Jay Westerveld that refers to making false or misleading statements about the environmental benefits of a product or service — was made in February in a suit filed by New York State Attorney General Letitia James against JBS, the world’s largest beef producer, over its claim it would reach net-zero emissions by 2040.
James’ suit against the Brazilian meat conglomerate came after Earthjustice successfully challenged JBS’ environmental messaging before an ad industry self-regulatory organization in 2023.
Livestock production accounts for 14.5% of all greenhouse gas emissions globally, with cattle responsible for two-thirds of the total, according to the United Nations Food and Agriculture Organization.
The Science-Based Targets Initiative, a UN-backed agency that reviews net-zero goals, is calling for the food and agricultural sector to reduce its emissions by 3% annually between 2020 and 2030.
Delta Air Lines last year dismissed as “without legal merit” a suit filed by a passenger that alleged the airline’s claim to be “the world’s first carbon-neutral airline” to be marketing spin. Coca-Cola is currently defending itself in a similar case in which the beverage make is accused of overstating its recycling efforts.
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A cooler rate climate benefits a wide range of borrowers. From prospective homebuyers to current owners looking to refinance to those saddled with high rates on personal loans and credit cards, lower rates offer a welcome economic reprieve. They also require a different approach than what many have been accustomed to in recent years. And with the Federal Reserve officially cutting its federal funds rate for the first time in four years on Wednesday, now could be that time.
For those considering borrowing from their home equity, there are multiple options available. But a home equity line of credit (HELOC) is arguably the best and most cost-effective way to do so right now, particularly compared to home equity loans and cash-out refinancing. Below, we’ll detail why you should strongly consider borrowing with a HELOC as the Fed begins to cut interest rates.
Start by seeing how low of a HELOC rate you could secure here.
Why you should open a HELOC as the Fed cuts rates
A HELOC, for much of the last two years, has arguably been a less beneficial way to borrow from your home equity than a home equity loan. That’s because the latter comes with a fixed rate that will only change if refinanced. And that was a major advantage in a climate in which rates were raised numerous times between 2022 and 2023.
But that environment looks to be changing now.
With the first rate cut since 2020 issued this week, and two additional ones likely for November and December (when the Fed meets again), a HELOC could take the preferential place of home equity loans.
That’s because HELOC rates are variable and subject to change as the rate climate does (usually every month). That’s a drawback when rates are high and rising but now becomes a distinct advantage as rates cool again. With a HELOC, borrowers will automatically see their rate fall without having to refinance on their own.
Not only will they then save with a lower rate, but they’ll also save out-of-pocket costs if they had pursued a home equity loan. That’s because home equity loans come with closing costs to refinance (1% to 5% of the loan’s value, on average). But if you pursue a HELOC, you can add those savings to what you’ve already got back with the rate drops.
It’s not a perfect trade-off, and right now, home equity loans have better rates than HELOCs (8.46% versus 9.26%). But if you’re looking to position yourself for maximum savings ahead of additional rate cuts, a HELOC may be best to open now.
Get started with a HELOC today.
Don’t forget the tax benefits
A HELOC, in addition to the variable rate nature that benefits borrowers right now, also comes with tax advantages. Specifically, you can deduct the interest paid on the line of credit if you use it for eligible home repairs and renovations. At the same time, home equity loans also come with the same tax benefit. So carefully consider your intended use before getting started and don’t make this the deciding factor considering both options offer the same tax feature.
The bottom line
A HELOC could soon become the preferential home equity borrowing option, if it isn’t already. With a variable interest rate that is set to decline as overall rates do, borrowers could be well-positioned to realize additional savings in the future without having to do any of the work (or pay for any of the costs) associated with refinancing a home equity loan. But both borrowing options do have tax benefits, and other unique features, so weigh them carefully against one another to better determine which one is the right fit for you now.