Having credit card debt does not mean that you are a failure. Although credit card debt could arise from risky spending habits, it can also accumulate simply from purchasing groceries and keeping the lights on in your home. You aren’t a bad parent or spouse for doing your best to provide for your family despite financial strain.
Actually, this type of debt is a national problem that rose significantly during 2017. Last year, the total amount of unpaid funds finally exceeded a trillion dollars, which works out to about $16,883 in debt per American household. This does not even count other kinds of debt, such as medical bills or student loans, which often accompany high credit card balances.
Tackle multiple debts strategically
The trouble with credit card debt is that it can turn into a never-ending cycle. Interest can pile up quickly for one debt while you try to pay another, which can make you feel like you’re getting nowhere. To counter this pressure, CNBC recommends two ways to break down intimidating debt, also known as the “avalanche” and “snowball” methods.
Using the avalanche method, you can focus on paying high-interest debts first to decrease the total amount you owe over time. You may see fewer interest payments pile up each month, which can make the total debt easier to manage.
Alternatively, the snowball method comes with a psychological incentive; you can choose to pay off the smallest debts first so that you can clearly see your progress. The mental reward of financial productivity can help you manage the next highest sum.
When debt becomes overpowering
If you are in over your head and you are unsure if repayment plans are even possible in your situation, researching bankruptcy options could be the first step in the right direction. The idea that bankruptcy is a sign of failure, like having credit card debt, is a myth. For many Kansas residents, it instead represents the new beginning they needed.