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The holiday season has come and gone, but for many Americans, the ghost of holiday spending past continues to haunt their credit card statements. That’s hardly ideal, considering that credit card interest rates are sitting at historic highs and inflation is still putting pressure on household budgets, meaning that for many cardholders, there’s a lot less room in the budget to deal with their increasing credit card balances.
If you’re among the millions of people struggling to get their compounding credit card debt under control, the good news is that you don’t have to tackle what you owe all at once. Whether you need a structured plan, a way to reduce what you owe or a temporary break from payments, there are options to help you get back on track — and even taking small, strategic steps can make a significant impact over time.
So what strategies should you use to regain control over your credit card debt this February? That’s what we’ll outline below.
Find out more about your debt relief options here.
3 simple ways to take control of your credit card debt this February
If you want to get your credit card debt back in check this month, the following options could be worth exploring:
Consolidate your debt to lower the costs
Debt consolidation is one of the most effective ways to manage multiple credit card balances. This type of debt relief typically comes in two main forms: traditional debt consolidation and debt consolidation programs.
Traditional debt consolidation involves taking out a personal loan (or another type of loan, like a home equity loan) with a lower interest rate to pay off your credit cards. This approach not only simplifies your monthly payments but can also save you significant money on interest charges. Right now, for example, personal loan rates for borrowers with good credit hover around 12% on average, which is substantially lower than the typical APR on credit cards, which is closing in on 23%.
Debt consolidation programs are another option. These programs are offered by debt relief companies, and when you enroll in one, you work with the debt relief company’s third-party lenders to obtain a loan to pay off your credit cards. These lenders specialize in working with cardholders who have minor credit issues, so a debt consolidation program can be a smart option if you have a high debt-to-income ratio, a few late payments or other minor credit problems that could make a traditional lender wary.
Learn how working with a debt relief expert could benefit you today.
Negotiate your way to lower balances
If you’re struggling to make even the minimum payments, debt settlement could provide some relief. This approach involves negotiating with your creditors to settle your debt for less than the full amount owed, and it can be done in two ways: DIY debt settlement or working with a debt relief company.
DIY debt settlement requires reaching out to your creditors and negotiating directly to try and reduce your balance. You’ll need to explain your financial hardship and offer a lump-sum payment or a structured plan to pay off a reduced balance. Your creditors may agree if they believe they won’t get the full amount otherwise.
Working with a debt relief company can make the debt settlement process smoother, though, as their experts handle negotiations on your behalf. These companies have extensive experience dealing with creditors and may be able to secure better settlement terms, which can make it worth paying the extra fees they charge for their services.
Ask for direct relief from your creditors
If you’re facing a financial crisis, such as job loss or medical expenses, your credit card issuer may allow you to enroll in a hardship program. While not all creditors offer these programs, many do, and they can provide much-needed breathing room while you get back on your feet in the form of lower monthly payments, reduced interest rates or even paused payments for a set period.
To take advantage of a hardship program, you’ll need to contact your credit card company and explain your situation. They may require documentation to verify your financial hardship, so be sure to have information about your income, expenses and the specific hardship you’re facing (job loss, medical expenses, etc.) on hand.
The bottom line
If you’re dealing with high-rate credit card debt, this February is a great time to get the issue under control and set yourself up for financial success. Start by evaluating your total debt, interest rates and monthly payment capabilities. Then choose the approach that best fits your situation — whether that’s consolidating your debts for a lower interest rate, negotiating settlements or working directly with your creditors through hardship programs. Whatever path you choose, though, the key is to start now and stay committed to getting your debt issues back under control.
