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If you’re carrying serious credit card debt — like $15,000 or more — you're not alone. The average household with revolving credit card debt — that is, debt that they carry from one month to the next — had more than $7,000 worth of revolving balances in 2019. That's just the average. It's not at all uncommon for households to be swimming in more that twice as much credit card debt.
But just because a $15,000 balance isn't rare doesn't mean it's a good thing. Credit card debt is seriously expensive. Most credit cards charge between 15% and 29% interest, so paying down that debt should be a priority.
However, dealing with a five-digit credit card debt can feel overwhelming. Coming up with that kind of cash is daunting, but there are steps you can take to manage a heavy debt load:
1. Stop charging
If you’re used to relying on your credit card to make your day-to-day purchases, cutting yourself off from charging might be really tough at first. But to get out of a hole, you’re going to have to stop digging.
It is essential to stop adding new debt by switching to cash or debit as soon as possible. If you know you’ll be tempted to charge, consider taking drastic steps: Cut up your card, or hand it over to a trusted friend or family member so that you won’t have easy access to it. Just do whatever you have to do to stop the bleeding.
Take charge and banish debt
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One of the worst things that you can do when you’re in credit card debt is pay only the minimums. Minimum payments equate to only 2-3% of the balance owed on the card, so if you don’t start upping your monthly payments, you’re going to be in debt for a very long time. This also means that you’ll be shelling out thousands in interest.
Paying at least double the required minimum payment every month will speed up your debt repayment plan substantially, but more is obviously better. Cut expenses in other areas to throw cash as possible at your plastic – it may be a sacrifice now, but the money you’ll save on interest by cutting down your debt as fast as possible will be well worth it.
If your credit score is good enough to allow it, it’s a smart idea to transfer your high-interest credit card debt to a lower-interest card. This will speed your debt repayment quite a bit, because you’ll be paying off the principle and any interest charges you’ve already accrued — new interest charges won’t be piled on every month, at least for awhile.
» MORE:Best balance transfer credit cards
4. Look into consolidating
If your credit card debt is spread between several high-interest cards, consolidating them all into a low-interest loan might be your best bet. Not only is it easier to deal with only one monthly payment, but if you choose your consolidation vehicle carefully you’ll also be paying a much lower interest rate. But this is where it’s important to be careful: Your consolidation loan’s interest rate needs to be lower than the lowest interest rate on your cards. Otherwise, consolidating isn’t worthwhile.
» MORE:Best debt consolidation loans
5. Consider credit counseling
If you’re feeling anxious and stressed about your credit card debt and can’t seem to get it under control no matter what you do, it might be time to consider credit counseling. Nonprofit credit counseling agencies will examine your whole financial situation and make specific recommendations based on your needs. Just be sure to work with a reputable agency, and commit to following the advice they provide.
» MORE:How credit counseling can help you
The takeaway: If you’re drowning in credit card debt, don’t despair. It may not be easy, but you can take steps to tackle your outstanding balance. With a stiff co*cktail of patience and discipline, you’ll be debt free sooner than you think!
It's not at all uncommon for households to be swimming in more that twice as much credit card debt. But just because a $15,000 balance isn't rare doesn't mean it's a good thing. Credit card debt is seriously expensive. Most credit cards charge between 15% and 29% interest, so paying down that debt should be a priority.
A minimum payment of 3% a month on $15,000 worth of debt means 227 months (almost 19 years) of payments, starting at $450 a month. By the time you've paid off the $15,000, you'll also have paid almost as much in interest ($12,978 if you're paying the average interest rate of 14.96%) as you did in principal.
Of those who had maxed out their credit cards, 85% said they were pushed to use their cards to the limit because of price increases from inflation. Approximately 22% of Americans said they now owe between $10,000 to $20,000 in credit card debt, and 5% have more than $30,000.
It will take 32 months to pay off $15,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
If you pay off your debt in full every month, it's the best thing you can do for your credit. By contrast, it hurts your score when your balances are too high. Anything over 30% credit utilization will decrease your credit score. So, you can use this as a measure of when you have too much debt.
By the time you reach your 40s and 50s, debts should be lower or almost gone. Student loans should be non-existent, you may be paying for cars in cash, you might be pre-paying your mortgage, and credit card debt should not exist.
The average American household now owes $7,951 in credit card debt, according to the most recent data available from the Federal Reserve Bank of New York and the U.S. Census Bureau. But that's just the average.
National Debt Relief is a legitimate company that has helped hundreds of thousands of people negotiate their debts. The company's debt coaches are certified through the International Association of Professional Debt Arbitrators (IAPDA). National Debt Relief is also a member of the American Fair Credit Council (AFCC).
Feelings of financial insecurity among Americans have reached their highest point in at least a decade. A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850. The higher your score, the better.
You make one payment 15 days before your statement is due and another payment three days before the due date. By doing this, you can lower your overall credit utilization ratio, which can raise your credit score. Keeping a good credit score is important if you want to apply for new credit cards.
Yes, $15,000 is a high credit card limit. Generally, a high credit card limit is considered to be $5,000 or more, and you will likely need good or excellent credit, along with a solid income, to get a limit of $15,000 or higher.
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