Record-High Credit Card Debt Outpaces Americans’ Savings

Here’s what credit card holders in debt can do

The following suggestions can help you set the path to solvency if you find yourself in credit card debt.

Transfer debt to a balance transfer credit card

If you have a monthly credit card balance that you can’t pay, your first priority should be to stop the interest being charged.

Credit cards with natural costs Double digit interest is notoriously high and our current environment of rising interest rates only makes those APRs higher. By signing up for a balance transfer credit card, you can take your balance that grows daily with interest and transfer it to a credit card designed specifically to give you more time to pay off that debt interest-free. And, if you can pause the interest accrual on your credit card, you can also focus on increasing your savings.

The following credit cards each offer an introductory 0% APR period of up to 21 months (and then charge the APR after the period ends) – in other words, you have almost two years to pay off your current credit card balance without additional interest. accruing. But remember to pay off your balance in full before the 0% APR period ends, otherwise you’ll be hit with the card’s interest rate fees.

Wells Fargo Reflect® Card

On Wells Fargo’s secure site

  • Reward

  • welcome bonus

  • Annual fee

  • APR intro

    0% intro APR for 18 months from account opening for purchases and qualifying balance transfers. Intro APR extension for 3 months with minimum payment in time during the intro period. 17.49% to 29.49% variable APR next

  • Regular APR

    17.49% – 29.49% variable APR on purchases and balance transfers

  • balance transfer fee

    3% introductory fee for 120 days from account opening, then up to 5% ($5 minimum)

  • Foreign transaction fee

  • Credit is required

Citi® Diamond Preferred® Card

  • Reward

  • welcome bonus

  • Annual fee

  • APR intro

    0% for 21 months on balance transfers; 0% for 12 months on purchases

  • Regular APR

  • balance transfer fee

    5% per balance transfer; $5 minimum. Balance transfer must be completed within 4 months of account opening.

  • Foreign transaction fee

  • Credit is required

Citi Simplicity® Card

  • Reward

  • welcome bonus

  • Annual fee

  • APR intro

    0% for 21 months on balance transfers; 0% for 12 months on purchases

  • Regular APR

  • balance transfer fee

    3% introductory fee ($5 minimum) for transfers completed in the first 4 months of account opening, then up to 5% ($5 minimum).

  • Foreign transaction fee

  • Credit is required

It is also smart to consider what credit card you use in your everyday life. While consumers can’t control the cost of basic expenses like groceries and gas, they can control how they pay for things they need.

Rewards credit cards like cash-back cards may be good for your wallet, but the interest rate you earn by carrying a balance outweighs the cash back rate you get. If you can’t pay off your balance, it’s best to use cash or (if you must use credit) charge your purchases on a card that offers 0% APR on new purchases.

All the above cards offer this. Remember that you only add your balance due before the 0% APR expires.

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Debt consolidation with personal loans

Those with credit card debt may also want to think about taking out a personal loan to consolidate their debt into monthly payments.

This move is a smart alternative to balance transfers for large amounts of debt on multiple credit cards. With a debt consolidation loan, you use the loan to pay off your credit card debt and then pay off the debt in monthly installments, usually at a lower interest rate than what you would pay on the card.

Personal loans also usually have a fixed interest rate rather than the variable rate you find on a credit card – meaning you’ll pay the same amount each month with a personal loan.

Some lenders to consider include LightStream, with low interest rates and flexible terms, PenFed for those looking for smaller loans and Find for anyone looking for quick funding. These loans also have no origination fees or early payments.

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    5.99%—23.99%* when you sign up for autopay

  • Purpose of the loan

    Debt consolidation, home improvement, car financing, medical expenses, weddings and more

  • Loan amount

  • Requirements

  • Credit is required

  • origin fee

  • Early payment penalty

  • Late fees

PenFed Personal Loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvement, medical expenses, car financing and more

  • Loan amount

  • Requirements

  • Credit is required

  • origin fee

  • Early payment penalty

  • Late fees

Find a Personal Loan

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvements, parties or vacations

  • Loan amount

  • Requirements

    36, 48, 60, 72 and 84 months

  • Credit is required

  • origin fee

  • Early payment penalty

  • Late fees

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If you’re struggling under the burden of credit card debt, you’re far from alone. The best action you can take to protect your financial future is to pay off your balance in full. Using a balance transfer card or debt consolidation loan can help you get out of the financial hole you’re in, no matter how deep it is.

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Editorial Note: Opinions, analysis, reviews or recommendations written in this article are only those of the Select editorial staff, and have not been reviewed, approved or approved by a third party.



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