Freedom Debt Relief: Our Look at Credit Card Debt by the Numbers

Aug 23

Nerdwallet conducted an extensive study called, “2016 American Household Credit Card Debt Study.” They found that the average American household with credit card debt had racked up an average balance of $16,425. These numbers are significant to us at Freedom Debt Relief, but you might be wondering what the big deal is.

It all boils down to the fact that having that amount of debt, especially as a consumer, is going to be costly in the long run. But what can you do to avoid the dangers of a large amount of credit card debt?

Understanding Credit Card Debt

First you need to understand what exactly credit card debt is. If you live in the United States, chances are you have some type of debt. It could be mortgage, auto loan or student loan debt—three of the most common types besides credit card debt.

Most of us understand the difference between these different types of debt. But most people don’t realize that consumer finance accounts are also considered credit card debt. This could be financing from a home appliance store or even a payday loan.

Taking steps to Reduce Credit Card Debt

While growing credit card debt is never good news, it can be managed. That is, if you’re ready and willing to create a plan to rid yourself of the costly burden of credit card debt.

  1. Create Your Goal

Whatever your goal is—pay off your most expensive debt, or achieve a debt-free life—write it down. Freedom Debt Relief, along with countless personal finance professionals, knows the power that writing things down could have to help you achieve your goals.

  1. Budget, Budget, Budget

A budget is a roadmap to your destination. And just like a real road map (or GPS), without one, you’re wandering aimlessly. Be realistic and don’t cut out the essentials, but be relentless in cutting out unnecessary expenses or finding ways to save on the mandatory expenses.

  1. Calculate Payments and Put Them in the Budget

Online payment calculators make it super easy for you to figure out how much you’ll have to pay and for how long to pay off your debt. Once you’ve decided on a reasonable amount that will remove your debt in a timely manner, go back to your budget and figure out if you can make it work. If not, either find more room in your budget, or reduce your payments.

  1. Find an Accountability Partner

Remember the statistic we mentioned in the beginning? Chances are you know someone who also struggles with credit card debt. See if they want to join in your battle against debt and hold each other accountable. It’s a very effective strategy that will keep you upbeat on tough days when you’re tempted to deviate from your plan.

  1. Get Help

Don’t be scared to ask for help. Kevin Gallegos, our VP here at Freedom Debt Relief, recommends considering a reputable debt relief firm. Like Freedom Debt Relief, one of these companies could help you determine you best options regarding debt consolidation, credit counseling or debt settlement.