Hint: It's not a small amount.
It's not uncommon to owe money on a credit card or two. Maybe you ran into a string of costly home repairs you needed to charge and pay off over time. Or maybe your health took a turn for the worse and you had to charge a bunch of medical bills on your credit cards in the absence of having the cash.
The average credit card balance among all U.S. consumers is $6,320.98, according to New York Life’s latest Wealth Watch survey. And consumers are paying an average of $430 a month toward that debt.
But at a time when inflation is surging, that $430 might be a huge burden. So if you're looking at monthly credit card payments you can't afford, it pays to explore your options for lowering them.
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A balance transfer could make your debt more manageable
A big reason why monthly credit card payments can be costly is that you're constantly accruing interest on your balances, thereby adding to your totals. That's why a balance transfer could make a lot of sense.
But you don't want to do just any old balance transfer. Rather, you should aim to move your existing credit card balances over to a new card with a 0% introductory APR.
Many of these cards will give you a break on racking up interest for 12 months or more. And that could make it possible for you to shrink your monthly payments on your credit card debt in the near term without digging yourself deeper into a hole.
Of course, if you really want to make progress on paying off your credit card debt, then lowering your monthly payments isn't your best bet. But you may need a few months to come up with a game plan for knocking that debt out. And you may need a little time to do something like line up a side hustle that will allow you to make decent progress. So if you do a balance transfer at a 0% introductory rate, you might end up with a lower monthly payment, which you can then pay more on as your finances allow for it.
Consider a personal loan, too
Personal loans make it possible to borrow money for any purpose. There's really no such thing as an interest-free personal loan, even for a period of time. But personal loans tend to come with much lower interest rates than credit cards do. So by lowering the interest rate on your loan, you can, in turn, make it so you don't have to spend quite as much money on a monthly basis.
To be clear, it's always a good idea to pump as much cash as you can into paying off your credit card debt. That way, you're likely to get rid of it sooner. But if you're paying somewhere in the ballpark of $430 a month and that sum just isn't affordable based on what living costs look like today, then it makes sense to explore different options that could leave you with lower monthly payments -- at least for the time being.
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