A 2018 study showed that the average amount of credit card debt per household in the United States is $5,700. This number shows that there are many people that carry more than that amount in credit card debt, and that can be a tough mountain to climb to get it paid off. The average interest rate on credit cards is in the neighborhood of 18 percent. People are often only able to make the minimum monthly payments on their credit cards, and that barely covers the interest amount being charged each month. There are ways, however, to lower monthly payments and consolidate debt to get it paid off more quickly.
Work With a Consolidation Company
The first option is to work with a debt consolidation company. These companies can work with credit card providers to lower the annual interest rate being charged which will lower the monthly payment that is due. A monthly plan is typically put in place to pay off the credit card debt in a much shorter time frame, but it may come with a negative impact to a person’s credit score. There is more online about this option which should be explored thoroughly before making a decision.
Get a Loan
A second option is to get a debt consolidation loan. This is a loan that banks or private lenders will give out to help people pay off debt quickly. The loan will pay the credit card balance, and it comes with an interest rate lower than those being charged by the credit card companies. For people with a good credit score, this is an option worth exploring because it will save a lot of money over time. Some of these loans need to be secured which means some sort of collateral needs to be put up to qualify for the loan.
Use a Home Equity Line of Credit
A third option is to use a home equity line of credit to pay off credit card debt. For anyone that owns a home and has equity in the home, this is an option. These loans essentially act as a second mortgage on the home. They come with fairly low interest rates, and can be paid back over a long period of time. This helps to reduce the monthly burden of the high credit card payments, and it clears the credit card debt.