Episode 307 – According to an estimate by Experian, the average American adult holds $6,501 in credit card debt. Is there a way out? Here are six things that you might want to try.

Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, six ideas on how to manage debt.

In today’s economy, you don’t have to be a big spender to feel overwhelmed by how much you owe. You’re certainly not alone. As of late last year, the average American adult held $6,501 in credit card debt, according to an estimate by Experian.[1] This is up 10 percent from the previous year. And credit card interest rates can be as much as 20 percent, or even higher.

Once you’re saddled with a significant amount of debt, there is rarely an easy way out. But if you’re in that situation, here are six things that you might want to try. The idea is to get your debt under control before it has more serious consequences for your financial health.

One final note. Owing money to someone else is not always such a bad thing, and living debt-free is not always the best choice. You need to look at the details of the debt itself. For example, if you bought a house a few years ago with a 3 percent mortgage and tax-deductible interest, why would you hurry to pay it back? You may be able to get a better rate of return simply by keeping the extra money and investing it.

[1] Horymski, Chris. “Average Credit Card Debt Increases 10% to $6,501 in 2023.” Experian.com.
https://www.experian.com/blogs/ask-experian/state-of-credit-cards/ (accessed October 21, 2024)

[2] Sherman, Emily. “6 Easy Ways to Pay Off Debt.” usnews.com.
https://money.usnews.com/money/personal-finance/debt/articles/easy-ways-to-pay-off-debt (accessed October 21, 2024)

[3] Frankel, Robin Saks. “5 Steps To Take Now To Save More And Reduce Debt.” Forbes.com.
https://www.forbes.com/advisor/personal-finance/steps-to-take-to-save-more-and-reduce-debt/ (accessed October 18, 2024)

[4] Coleman, Sara. “The pros and cons of 0% APR credit cards.” Bankrate.com.
https://www.bankrate.com/credit-cards/zero-interest/pros-cons-of-zero-percent-apr-cards/?tpt=b (accessed October 21, 2024)

[5] Sorter, Amy. “7 tips to help dig your way out of debt.” Bankrate.com.
https://www.bankrate.com/personal-finance/debt/ways-to-get-out-of-debt/?tpt=b (accessed October 18, 2024)

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