Americans are definitely feeling the impact of inflation with the biggest jump in credit card debt in two decades. Millions of households throughout the U.S. rely on credit cards to make ends meet, but with food, housing, and gas prices breaking new records, it’s becoming harder and harder to pay off credit card debt. But, the good news is, that there are ways to get the situation under control.
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Spending down
Most credit card holders in the U.S. have debt that exceeds $15, 000. Those in their 20s and 30s are finding it very hard to purchase their first home, simply because it’s become more difficult to keep up with credit card payments. In the past, they were able to pay it off easier, which is why they thought they could afford certain things like having a bigger wedding or buying a new car. But, the current situation has them somewhat stranded. One possible solution to this predicament is down spending, according to finance experts. In other words, if a new car or a big wedding is something that would burden your credit card even more, perhaps, it isn’t the best time to commit to such big expenses. The same goes for life’s miscellaneous luxuries that one can do without.
New bank accounts and personal loans
According to NBC reports, Americans opened 223 million new accounts in the past year, which is the highest number since 2008. Balances still remain lower compared to pre-pandemic levels, with interest rates now averaging up to 17.4 % which could soon soar to a record high. New bank accounts and loans certainly come as a lifesaver for many who have mouths to feed or businesses to keep afloat. Prosper Loans, for instance, is one such type of personal loan that enables individuals to borrow up to $40, 000. Needless to say, it’s an amount that could certainly turn things around for many households during these tough times.
Financial experts also advise transferring balances to cards offering 0% introductory rates or turning to non-profit financial counselors for help. But one crucial step that credit card holders should not forget about is making payments as regularly as possible. As difficult as it may be currently, it’s one aspect, according to financial advisors, should not be neglected, forgotten about, or simply omitted on purpose because it’s the convent solution in the short run. Instead, if your situation allows, make it a priority to pay off as much credit card debt a month as you possibly can – it will positively affect your financial future.
Is it safe to hope for better days?
America hasn’t faced such a crisis in a long time, but the good news is there is reason to hope things will turn around in the months to come. The White House recently noted some inflation relief, with gas prices now averaging $4.16 a gallon – down 85 cents from the record high set in June this year. Soon, it’s expected to fall below $4 a gallon, and hopefully, the same will be true about food, housing, and other miscellaneous expenses.
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