Louisville, KY—September 13, 2017—CBS News announced last month that the total amount Americans owe on their credit cards has reached more than $1 trillion—an all-time high. “It’s dangerously easy to fall into credit card debt,” said Carla Dearing. “For some of us, it starts with a single indulgence that can’t be paid off in a given month. For others, using credit cards to spend more than they have in a given month has simply become a habit.” Carla is CEO of SUM180, an online financial wellness service designed to be simple and affordable.
The statistics are sobering:
- The average credit card balance per household is now $9,600; roughly 17% of the average U.S. household income.
- With credit card interest rates running between 16% and 24%, credit card debt is growing $1,600 to $2,300
“If you cannot pay off your credit cards monthly, you are, clearly, living beyond your means. Allowing this situation to continue can have serious consequences for your financial security now and into the future,” Carla continued.
“And, credit card debt is a particularly expensive type of debt. Interest on credit card debt is usually many times more than that of other kinds of debt. The interest you pay is also many times more than what you could make if you put your money in a savings or investment account. So, every penny you pay down on your credit card saves you a lot of money in the long run.”
Carla recommends the following strategies to help pay off your credit card balances:
- Contact your credit card company and ask if they will lower your annual percentage rate (APR) on the card. Many credit card issuers would rather lower your rate than have you transfer to another company. It’s worth asking.
- Use as much as 50% of your monthly savings to pay down your credit cards completely in the coming months.
- Watch for credit card offers you receive in the mail (for which you are pre-approved). Often, these offers include a low fee to transfer your balances and then a period of time with 0% interest. If you are able to transfer the balances from a higher cost card, you can pay that balance off much more quickly if it’s not accumulating interest. Be aware that the 0% interest rate does not apply to new spending.
- If you own a home and have accumulated some equity in it, consider whether a home equity line of credit (HELOC) is appropriate for you. The interest rate on a HELOC is often significantly lower than the interest rate on credit cards. By paying off the credit card and moving that balance to a HELOC, you’ve reduced the amount of interest that will stack up and will be able to pay off the debt more quickly as a result.
“The record-breaking credit card debt figure should be wake-up call for all, and paying down credit card debt should be a top priority. Then, once the debt it paid off, consumers should continue to pay off credit cards every month, with few exceptions,” Carla concluded.
SUM180 is an online financial wellness service designed to make planning and dealing with your money simple and affordable. Specifically, SUM180 is differentiated in the following ways:
- SUM180 meets people where they are. SUM180 plans are personalized to help people wherever they are right now on their financial journey; whether they’re just beginning, starting over or well on their way.
- SUM180 plans are simple. They start with only the three (3) most important next steps, making them easier to accomplish, and gives clients a clear picture of where they are.
- SUM180 doesn’t assume clients want to become financial experts to meet their financial goals. SUM180 provides the tools they need, without overwhelming them with “education” and details they don’t need.
- SUM180 offers a community for users, unfiltered, which allows them to explore and share.
- SUM180 serves; never sells. Earning and keeping client trust is SUM180’s highest priority. SUM180 never makes commissions from any of its recommendations, ever.