National Debt Hits New Record High – How Can You Pay Yours Off?

by Jacob Lundski 0

Consumers continue to dive deeper into credit card debt. The Federal Reserve released figures reporting that credit card debt hit a record of $1.02 trillion in November, which averages to $3,158 of credit card debt per person in the United States.

Anyone using a credit card should pay balances on time and in full every month to avoid interest. Yet, if a person has incurred debt, a plan helps cut credit card debt.

Face Your Credit Debt

A good first step is realizing just how much debt one has incurred. People can’t pay off credit card debt if they don’t know the exact amount owed. They can start by contacting creditors they owe, reviewing credit card reports, or checking their bank’s app or website.

Repeated and unnecessary expenses can become clear by examining all debts owed. This will also help make it clear whether the repayment strategies being used are effective towards paying down their debt.

Avalanche and Snowball Methods

There are two popular methods to pay off debt: the debt snowball and debt avalanche methods.

For the debt snowball method, the account with the smallest balance is tackled first. People using this method should make minimum payments on all accounts, but pay as much as possible each month toward the account with the smallest balance. When this amount is paid off, move on to the next smallest until all the debts are paid off. People that prefer the snowball method see it as encouraging to pay off small debts and have fewer debts.

The debt avalanche method will minimize the overall cost of interest as debt is paid off. Even though the snowball method can provide motivational quick wins, it won’t necessarily reduce debt fastest due to the extra interest cost. With this method, the focus will be on the account with the highest interest rate. Consumers should pay the minimum amount due on every account, but pay as much as possible on the account with the highest interest rate each month to start eliminating debts.

 Balance Transfers

Balance transfers are another debt management option available to help pay down money owed. Balance transfers consist of transferring a balance from one credit card or account to another.

Consumers that are in debt can use balance transfers to reduce the amount of interest paid. There are certain cards that offer a 0% introductory annual percentage rate for balance transfers. This gives an opportunity to pay off the balance without any extra fees. It’s important to remember that the debt is still owed, and if not paid back on time then more interest occurs.

Keep Credit On Your Good Side

Once the debt is successfully paid off, people must develop the habit of using credit cards responsibly, so they don’t fall into debt repeatedly. Consumers should only make purchases they can pay off every month, since this allows debt and interest to be avoided.

Consumers receive different benefits from credit card issuers when signing up for a card. Usually, credit cards offer rewards as consumers make their purchases. For example, the Amex Blue Cash cards provide a percentage of cash back on purchases. This is money a consumer wouldn’t usually get back while using other payment methods like cash.


Although the federal reserve reports that credit card debt is at an all time high, there are strategies to help individuals cut their own debt. By using credit cards responsibly, credit card debt can be completely avoided. In addition, credit cards can be an asset by providing certain benefits. However, if debt does accumulate, coming up with a plan and using different strategies can help a person climb out of credit card debt and get back on track.

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