5 Things to Know About Credit Card Debt

If you’ve got credit card debt, there are a few things you should know. First off, you’re not alone. Many people are struggling to pay off credit card debt. That said, there are ways you can use credit cards and not be among those who are shouldering a load of debt that weighs on their minds at night.

Here are five things you need to know about credit card debt—and how to get out of it.

#1 – You don’t need to pay interest. You can transfer your debt to a balance transfer credit card with a 0% APR and pay off your debt faster. There are many different balance transfer cards available, whether you have excellent credit, average credit, or even limited credit. You may pay a balance transfer fee for the privilege of skipping out on interest, but this is usually well worth it. Balance transfer offers are usually good for at least six months, and often a year or even longer. During this introductory period, you can make plenty of headway paying off your debt.

#2 – Your APR is negotiable. If you don’t want to transfer your balance, or if you’ve already transferred your balance and your promotional rate has expired, you can still try to get a lower APR. Look around for a low-APR credit card, or just call your card issuer and ask if they can help you out with a lower rate. It never hurts to ask. And if you’re having trouble making your payments, your credit card issuer may be willing to work with you to figure out a lower-interest payment plan.

#3 – Your debt affects your credit score. Your debt-to-available credit ratio is one of the bigger factors in your credit score. To find out what it is, add up the credit limits on all your cards and other credit accounts. Then add up your debt. Your debt should ideally be less than 30% of your total available credit. Less than 10% is even better. So the faster you pay down that debt, the faster your credit score will rise.

#4 – You can pay it off. This might sound obvious, but to many people, credit card debt is a deep dark hole they feel they will never be able to climb out of. However, with some small effort, you can pay off your debt. So don’t get discouraged. Make a budget, write down exactly how much you owe, what your APRs are, and how much you can afford to pay each month. All you need is a plan, the willpower to stick to it, and some patience.

#5 – You are in good company. The median debt per household in the United States is $2,300, and the average debt per person is $5,700. So don’t feel like you’re the only one trying to pay off debt. Many others are doing the same thing—and if you’re reading this, you’re ahead of the game.

You can pay off your debt, you can pay less interest overall, and you can rehabilitate your credit score if it’s seen better days.