You Won't Believe How Much Credit Card Debt Americans Owed in 2023
Credit card balances were high last year. Read on for tips on paying yours off.
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Many consumers struggled financially in 2023, and understandably so. Despite a strong economy, inflation remained high. And given that a lot of people still haven't recovered from the financial impact of the pandemic, it's easy to see why credit card balances rose last year, according to New York Life's latest Wealth Watch survey.
In fact, that survey revealed that among consumers with credit card debt, the average balance owed was $7,931.80. That's an increase from 2022, when Americans owed an average of $6,320.98.
If you're carrying credit card debt, it's best that you get it paid off in short order. The longer that debt lingers, the more it might cost you in terms of interest. Also, too much credit card debt has the potential to damage your credit score, making it harder and costlier to borrow money. So it could pay to take these steps to knock out your credit debt once and for all in the coming months.
1. Consolidate your balances
You may be carrying a balance on more than one credit card, and that can be challenging. In that scenario, you run the risk of forgetting to make a payment. Plus, it's just plain stressful having to pay multiple credit card bills in the same month.
As such, you may want to consolidate your existing credit card balances into a single balance. If you can find a card with a 0% introductory rate, you'll get a break from racking up interest on the sum you owe temporarily.
Another option is to consolidate your credit card balances into a personal loan. That way, you'll lock in a fixed interest rate on your debt, leaving you with the same payments month after month.
2. Get a second job
It's definitely not easy to juggle a side job when you already have a full-time job to manage. But if you're eager to shed your credit card debt quickly, boosting your income may be a better way to go about it than cutting back on spending. Even if you're willing to reduce your spending, you may not be able to do so to enough of a degree to pay down your credit cards by the end of the year.
Now, the good thing about the gig economy is that many of the jobs you'll find are fairly flexible. And that could make a side job easier to manage. So to that end, look at gigs like driving for a ride-hailing company or delivering food or groceries. If you're good with people and are willing to shuttle them around town or make friendly conversation when you drop off their pizza, you may find that you're able to boost your income nicely with tips alone.
Whether you owe somewhere in the ballpark of $7,931.80 on your credit cards or another sum, the sooner you get that debt paid off, the better. Consolidating your debt could make it easier and more cost-effective to pay off. And if you're able to boost your income with a second job, you may find that you're able to close out 2023 without debt hanging over your head.
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