Published in: Credit Cards | Nov. 19, 2019
Credit Card Debt Stressing You Out? You Aren't Alone
By: Christy Bieber
Stress is common when you owe on credit cards -- and with good reason.
According to a recent poll conducted by Morning Consult, close to half of American adults have credit card debt. Unfortunately, owing money on a credit card comes with more than just financial cost: It can also be very stressful.
The poll found that 60% of adults feel either some stress or a lot of stress about credit card debt, with 30% indicating that they worry a lot about what they owe. There's good reason to be worried about being indebted to a creditor. But stressing about money can also take a toll on your happiness.
The good news is that you don't have to live with your worries about your credit card debt. You can take steps to reduce the financial cost of your cards and become debt-free ASAP so this source of stress disappears for good.
There's good reason to worry about credit card debt
Most adults worried about their credit card debt have cause for concern. It's an expensive form of debt, with interest rates routinely hovering around 17%.
Credit card debt is expensive not just because of high interest rates but also because of the way the debt is structured. Card issuers require you to make only very small minimum payments when you carry a balance. If you pay just the minimum amount, much of your payment will go toward interest and it will take you forever to reduce your principal.
Here's an example: Let's say you have a $2,000 balance on a card with a 17% interest rate. If you make only the minimum payments of 2.5%, it would take you 14 years to pay off. And you'd pay more than $2,100 in interest. Paying so much in interest would stress anyone out.
But you can tackle your debt problem for good
If you're stressed about your credit card debt, it's time to turn those worries into action. The best way to alleviate your concerns is to make a plan to become debt-free. Then you can follow through with aggressive debt repayment.
Start by listing all of the credit cards you owe money on along with the interest rates. If possible, look into refinancing some or all of that debt. You could take out a personal loan and use it to pay off the cards or transfer the debt to a balance transfer card with a 0% promotional APR on transferred balances.
If you can qualify for a personal loan or balance transfer and reduce the rate on your cards, you'll only need to make payments on your new lower-interest loan until you're debt-free. Pay as much as you can each month toward the new debt so your balance decreases as quickly as possible. If you've used a balance transfer card, repay the debt by the time the promotional rate expires or the interest rate could jump dramatically.
If you owe multiple creditors but can't refinance all of your existing credit card debt into one new lower-interest loan, you'll have to decide which card to pay off first. You'll also want to make a budget that prioritizes putting as much money as possible each month toward your payment plan. Work on paying down one card first, then move to the next one on your list until all of your debt is gone.
Don't live with the stress of credit card debt
If you're among the majority of Americans who stress about credit card debt, now is the time to take action. Start paying off your debt today so you aren't still worrying about your credit card a few decades from now when you've wasted thousands on interest.
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