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Can't afford more than the minimum credit card payment? Here are your options.

From CBS News · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • High inflation and elevated borrowing costs have made credit card debt harder to escape, with average interest rates near 22%.
  • Many cardholders are finding it impossible to pay more than the minimum, leading to extended repayment timelines and accumulating interest charges.
  • Options for those struggling include contacting card issuers for hardship programs, which may offer reduced interest rates or temporary payment pauses.

Escaping credit card debt has become increasingly challenging in the current economic climate, characterized by persistently high inflation and elevated borrowing costs. Average credit card interest rates are hovering near 22%, making it difficult for consumers to manage their balances effectively.

Making only the minimum payment on your credit cards isn't a failure, but it also isn't a plan.

— Angelica LeichtDescribing the reality of making minimum payments on credit cards.

This situation has led to a growing number of cardholders, including those who previously paid off their balances promptly, finding that interest charges now consume a larger portion of their monthly payments. With budgets already strained by rising costs across the board, many are reaching a point where paying more than the minimum payment feels impossible.

At nearly 22% on average, it doesn't take much for the credit card interest charges to rack up quickly on a revolving balance.

— Angelica LeichtHighlighting the high average interest rates on credit cards and their impact on accumulating debt.

While making only the minimum payment typically keeps an account in good standing, it significantly extends the repayment period and allows interest charges to accumulate substantially. However, being limited to minimum payments does not necessarily mean consumers are without options. Several strategies can help reduce interest costs, lower monthly payments, or manage debt before it becomes unmanageable.

With budgets stretched thin, many cardholders have reached the point where paying anything beyond their card's minimum payment feels impossible.

— Angelica LeichtExplaining the financial strain many cardholders are experiencing, making it difficult to pay more than the minimum.

One crucial step is to contact the credit card issuer directly and inquire about hardship programs. Many issuers offer assistance for those facing financial setbacks, such as job loss or medical issues. These programs, though often not advertised, can provide temporary relief through reduced interest rates, lower minimum payments, or even payment pauses. Even a modest rate reduction or a short-term pause can make a significant difference in managing debt.

So, what are they? Below, we'll examine several worth considering.

— Angelica LeichtIntroducing the discussion of options for individuals unable to afford more than the minimum credit card payment.
DistantNews Editorial

Originally published by CBS News. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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