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.