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Using the right debt relief strategy for your credit card debt could pay off this March.
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There’s no question that using a credit card to finance your purchases can be a convenient route to take. After all, all you have to do is swipe your card if you want to stretch out your payments and earn rewards while doing so. But while using a credit card may be a simple way to pay, it’s also one of the least affordable financing options to use, especially if you’re not paying off your balance in full each month. Doing that isn’t a feasible option for every cardholder, though — especially in today’s tough economic environment.
After all, everything from grocery to gas prices have been rising recently, meaning that everyday expenses are consuming a larger portion of most people’s household budgets. In turn, those carrying credit card debt may be struggling to find room in their budgets to pay down what they owe. It’s important to find a solution to that issue, though, as it’s surprisingly easy for this type of debt to balloon out of control due to the high rates that come with it, which can cause the interest charges to accumulate quickly.
Luckily, there are many credit card debt relief options to consider if you’re carrying a revolving balance from month to month, from debt consolidation to debt forgiveness. So, if you do your homework, it could be possible to find the right solution for your unique needs. And, there are a few big reasons to pursue credit card debt relief this March, in particular.
Start tackling your high-rate debt today.
Why credit card debt relief makes sense this March
Here’s why this March presents a particularly important window for addressing your credit card debt.
Inflation is causing financial strain
Inflation has been on a steady incline over the past several months, impacting the cost of goods and services nationwide. The annual inflation rate edged up to 3.0% in January, according to the most recent data, up from 2.9% the month prior. That marked the fourth consecutive monthly increase. This upward trend means that consumers are now paying more for essentials.
For those carrying any amount of credit card debt, inflation poses a significant challenge. As the cost of living increases, less money is available for debt repayment. This can make it difficult to keep up with your minimum payments, let alone make extra payments to reduce your principal balances. Consequently, your credit card debt balances may remain stagnant or even grow, leading to prolonged financial strain.
Addressing your credit card debt amid today’s inflationary environment is crucial. But even if you aren’t financially stressed just yet, tackling your credit card debt this March can prevent financial stress from escalating as prices continue to rise.
Learn about the debt relief options available to you this March.
Credit card rates have been on an upward trajectory
Credit card interest rates have been on a steady upward trajectory and are currently sitting at a record high of nearly 23% on average. This makes them one of the most expensive borrowing options to utilize this March, and if that upward rate trend continues, it could be even tougher to maintain your debt.
Credit cards have variable rates, after all, so your card issuer is free to regularly adjust the rate you pay. And, while other borrowing options have historically experienced periods of rate declines, credit card rates have maintained their upward trajectory over the last several years. So, it’s unlikely that your credit card rates will go down, despite the variable-rate nature. They typically just go up instead.
For those carrying balances from month to month, these high rates mean that a substantial portion of each payment goes straight to interest rather than reducing the principal balance. A card with a 23% APR on a $5,000 balance would result in you paying nearly $1,150 in interest annually, for example. But addressing your card debt this March, before rates climb even higher, could result in significant savings.
Waiting will only compound the issue
Credit card interest works through a unique mechanism: compound interest. Unlike simple interest, which is calculated based solely on the principal amount, compound interest generates interest on both the principal and previously accumulated interest. This creates an accelerating debt spiral that grows exponentially over time.
Here’s how this works in practice: if you carry a $10,000 balance on a card with 23% APR and make only minimum payments (calculated as interest plus 1% of the balance in this case), it would take nearly 30 years to pay off the debt completely. During that time, you’d pay more than $18,500 in interest.
This compounding effect is particularly devastating because it works against you all the time. Interest accrues daily on most credit cards, meaning every day you delay addressing the debt, the problem grows bigger. So, by taking action this March rather than waiting until summer or fall, you could save substantial amounts in interest and dramatically reduce the time needed to become debt-free.
The bottom line
With inflation continuing its upward march, credit card rates at historic highs and the relentless math of compound interest working against borrowers, delaying debt relief measures simply doesn’t make financial sense. But taking action now, though — whether through debt consolidation loans at lower rates, negotiating with creditors, pursuing balance transfer offers or seeking professional debt relief assistance — could be the best financial decision you make this year. So, do your research, compare your options and decide which path makes the most sense for you this March.
Angelica Leicht
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