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02-11-2020 • How to Manage Credit Card Debt

CONSIDER THIS: The debt crisis in America is approaching $14 trillion—with credit cards making up 26.2 percent of that. According to, more than 189 million Americans have credit cards. An average household has at least four cards, carrying roughly $8,400 in credit card debt.

The good news is—even for those struggling with credit card debt—that interest rates seem to be on the decline. reports the average credit card interest rate for new cards is currently 17.3 percent, down three quarters of a percentage point since the Federal Reserve cut rates in fall of 2019. However, the annual percentage rate (or APR) is still at a near record high: up from 16.8 percent in 2018. If you’re dealing with credit card debt, how can you manage it better? Here are a few tips to help.

Assess your financial situation. Create a list of everything you owe, including monthly bills, credit card balances, and the APR for each card. Then, compare expenses with income.

Secure a better rate. According to, sometimes all it takes is a simple phone call to (politely) request a better rate. Shaving off even a percent or two could save you hundreds of dollars while repaying your debt.

Prioritize your spending. Cover the basics (food, housing, clothing) first, then pay the minimum amount on all secured debts, like your home and car loans. Finally, start working on your credit card debt. Try to use cash or debit cards only while paying down debt. Pay at least the minimum balance on all outstanding debt to avoid hefty late fees.

Decide on a strategy. When paying down credit card debt, it’s important to have an action plan. You could focus on paying down the card with the highest interest rate first, while making minimum payments on the other cards. You could pay the lowest balance first, while paying minimums on the others. Or you could tackle the card with the highest amount. The point is to find a way that will motivate you the best in your quest to get rid of your debt.

Create concrete goals. Perhaps getting rid of credit card debt will afford you a down payment on a house, new car, or dream vacation. Keep your eye on the prize! When you’re tempted to stop your action plan or use those credit cards, remember your goal.