7 Steps to Get Control of High Interest Credit Card Debt

  • July 13, 2021
  • By: Julie Rogier
  • With a multi-decade career in communications, Julie Rogier serves on GreenPath’s content marketing team. She has presented on financial wellness for groups including the 2021 and 2022 Financial Services Midwest Summit, and regularly writes about financial health and wellness for several publications including U.S. News and World Report.

KEY TAKEAWAYS

  • Gaining control of high-interest unsecured debt such as past due consumer credit card balances is crucial for maintaining financial health and achieving long-term stability.
  • High interest rates like credit cards can quickly snowball and become financially burdensome with a significant portion of monthly payments going toward interest rather than reducing the principal amount owed.
  • There are steps to take to manage high-interest unsecured debt, ultimately paving the way for a more secure and stress-free financial future.

Whether using credit cards for those “one-click” online purchases, or the ease of swiping your card at your favorite coffee shop, credit cards are convenient tools when managing money.

It’s likely that those card swipes are taking place more often than in past months. Many people are spending more freely as the economy turns around from the pandemic.

As an example, as summer travel opens back up again, credit cards are handy when you want to book a flight, rent a car or stay in a hotel room.

Reward programs make it even more attractive to swipe that credit card. Credit cards with a reward program give borrowers bonus points for categories of spending like restaurants, groceries or gasoline. When certain bonus points are reached, cardholders can redeem them for gift cards, merchandise, travel or other bonuses.

With these benefits and many more, it’s easy to see why the majority of people make daily use of their credit cards.

The challenges come into play when it becomes difficult to pay credit card balances in full and on time.

Most credit cards charge high-interest rates — as much as 18% or more as of this writing. With each passing month, it becomes more difficult to pare down those balances as the high-interest rate fees grow along with the balances as additional purchases are made.

Common Challenges

Some of the more common challenges we hear include:

  • Borrowers who started with a low introductory rate, expecting to pay off the balance quickly, but life happened and now they are paying a much higher interest rate and minimum payment than they anticipated.
  • Credit card borrowers who experienced a spike in interest when they unexpectedly missed a payment due date.
  • People who started with the best of intentions to pay off their credit card balance each month, but over time, the balance slowly increased to a point where the debt feels overwhelming.

For the millions of people who owe money on high interest credit cards, the wisest thing is to pay off the balance in full as quickly as possible. But that’s easier said than done, depending on your specific financial picture.

The 7 Steps

In order to get control of the situation, here are seven things to keep in mind:

  1. Know exactly how much credit card debt you owe.
  2. Track the interest rate of each card and the balance you carry.
  3. Limit the amount of credit card usage as much as possible.
  4. For unpaid balances on multiple credit cards, pay down the card that charges the highest rate first.
  5. If you must use your credit cards, try to use cards with low interest. You can also request a reduction in your interest rate as a hardship option.
  6. Have a fresh set of eyes review your situation. Talk to a trusted national nonprofit credit counselor, like those at GreenPath, who can contact your creditors with you, and ensure you understand your options.
  7. Counselors can help focus on your total financial situation and make a personalized plan to address the debt moving forward.  Having a clear strategy for handling your credit card debt can help you feel more in control of the situation and reduce stress.
Maria Alegre

Getting Control of High Interest Credit Card Debt Starts with A Conversation

GreenPath works with thousands of people every year to make a customized plan, lower interest rates, pay down debt, and save money.

Get Control with a Plan

With the suggested steps noted above, it is possible to get in control — especially when you realize you are not alone.

GreenPath’s debt management program takes into consideration your total financial picture, from outstanding credit card payments to overall financial health.

Wrangling high interest credit card debt can be stressful. NFCC-certified financial counselors receive training in compassion and empathy and can help you understand options that meet each person’s needs.

Julie Rogier Profile Picture
ABOUT THE AUTHOR

Julie Rogier (She/Her)

With a multi-decade career in communications, Julie Rogier serves on GreenPath’s content marketing team. She has presented on financial wellness for groups including the 2021 and 2022 Financial Services Midwest Summit, and regularly writes about financial health and wellness for several publications including U.S. News and World Report.

High Interest Rates

GreenPath is a trusted, national nonprofit that has helped more than 65,000 households eliminate more than $200 million in debt since 1961. Call today.

Client Testimonial

“I was impressed by the kindness and openness of the reps and the fact that they don’t judge me. They’re 100% there to help me. Working with GreenPath has definitely improved my credit score.”

Stars Consumer Affairs

Douglas of Saint Ignace, MI via ConsumerAffairs.com

GreenPath Counseling Hours

Call 800-550-1961 for immediate help. Or request a call from a counselor at a more convenient time.

Call 877-337-3399 for immediate help. Or request a call from a counselor at a more convenient time.

  • Monday-Thursday 8:00 am – 10:00 pm Eastern
  • Friday 8:00 am – 8:00 pm Eastern
  • Saturday 9:00 am – 6:00 pm Eastern

Julie Rogier

With a multi-decade career in communications, Julie Rogier serves on GreenPath’s content marketing team. She has presented on financial wellness for groups including the 2021 and 2022 Financial Services Midwest Summit, and regularly writes about financial health and wellness for several publications including U.S. News and World Report.