Credit Card Debt Help: What You Need to Know

Credit Card Debt Help
BY Erik J. Martin
Oct 20, 2022
Key Takeaways:
  • If you have too much credit card debt, there is debt help available.
  • Debt consolidation, debt management, and debt settlement are all solutions for credit card debt.
  • Credit card debt help won’t work unless you stop overspending.

It’s easy to feel trapped and powerless by mounting credit card debt. But if you’ve overcharged beyond your ability to consistently pay back one or more credit cards, don’t panic: You can get credit card debt help, including for debt over $10,000 or more.

Need help with credit card debt? There are strategies you can explore to chip away at your outstanding balances, including maneuvers that may reduce or eliminate some of your debt. This article is designed to guide you toward effective credit card debt repayment solutions.

Getting help with credit card debt

The convenience and easy accessibility of plastic credit cards present a double-edged sword. On one hand, using credit cards is safer than carrying cash around, and you can earn points and rewards for using your credit cards. But on the other hand, if you overspend and push your credit limits to the max, you can quickly find yourself facing a formidable mountain of credit card debt.

What’s important here is to recognize if and when you have a credit card debt problem and realize that this dilemma is only going to get worse if you ignore it or delay repayment. Keep in mind that carrying a balance from month to month on a credit card means incurring high interest rates. Compounded interest can make it extremely challenging to pay off a credit card, as most credit card interest rates are in the double digits. But the sooner you start taking steps to address your debt, the quicker you can rebuild your credit, get your financial house back in order, and enjoy peace of mind.

Need help paying off credit card debt? The good news is that credit card debt help is available. Among the tactics used are:

  • Debt acceleration

  • Debt consolidation

  • Debt settlement

  • Credit counseling

  • Debt management plans

  • Bankruptcy.

Pay down credit card debt faster

One surefire way to improve your debt situation is to follow one of two debt acceleration strategies: debt avalanche and debt snowball.

With debt avalanche, you attempt to repay your debts that have the highest interest rates first, being that these are the most costly debts. The debt avalanche approach will gradually get you out of debt and save you the most money on interest payments.

Here, you select a single credit card debt to repay first – the credit card with the highest interest rate. Then, pay more than the monthly minimum due on this debt until you’ve wiped the slate clean. Next, start tackling the credit card debt with the next highest rate of interest, and so on, until all your credit card debts are paid off.

With debt snowball, you give priority to credit card debt repayment per the smallest to highest outstanding debt balance. The trick here is that you contribute the maximum you can afford each month toward that balance, first paying off the smallest balance and then focusing on the next smallest balance, and so on. Think of it like a snowball that builds momentum. Once your card with the lowest debt is fully repaid, you will devote the minimum payment you were making on that old debt to the next-smallest credit card balance due.

Pursue credit card debt consolidation

Another approach is to consolidate debt, in which you combine several different credit card debts into a single monthly bill, thus pursuing a streamlined and simple payoff strategy.

With debt consolidation, you roll all of your credit card debts into one consolidated loan and therefore have a sole monthly payment instead of multiple credit card monthly payments. The advantage here is that a debt consolidation loan will likely charge much less in interest than your credit card would.

Pursue credit counseling

When you need help paying off credit card debt, you can turn to an expert like a nonprofit credit counseling agency. These pros are often certified and experienced in debt and financial counseling, consumer credit, and budgeting.

With this option, you’ll meet or talk with a skilled counselor who will review your financial situation and suggest specific tips to resolve your credit card debt. The counselor can help you access your credit reports and credit scores, create a budget that works for your situation, and more.

Pursue a credit card debt management plan

Alternatively, consider a debt management plan (DMP) offered by a nonprofit credit counseling agency. This plan can consolidate different credit card debts into a single payment and decrease your interest rate.

You’ll pay back the debt over typically three to five years. And as a plus, it can have a lesser impact on your credit score than debt relief or bankruptcy. That’s because you will fully repay your original credit card debt.

Pursue debt settlement for credit card debt

Here’s an enticing option: Decrease, reorganize, refinance, or get forgiven on your credit card debt. Any of these are possible when you explore debt settlement, also called debt relief.

Under this arrangement, a debt settlement company negotiates for you a lump-sum payment with your credit card company, which agrees to receive less than the full amount you owe on your credit card debt.  While debt settlement can possibly save you money, expect to pay a service for professional services. Never pay an upfront fee.

Pursue bankruptcy for credit card debt

As a last resort, you might want to ponder filing for bankruptcy. This requires going to court and explaining to a judge the extenuating circumstances behind why you cannot repay your credit card debt. Your finances will be carefully scrutinized by the judge and a court trustee, who will determine if any of these debts will be canceled.

Two forms of bankruptcy are Chapter 7 or Chapter 13. With the latter, you are obligated to repay your debts, but you can reorganize them via federal court guidance and be permitted a three to five year window in which to pay off your debts. But you must earn sufficient income to be eligible, and the total amount of any unsecured debt must not exceed $419,275. Also, secured debts like a home or car loan must be paid off first. Unsecured debts, which include credit card debt, come last.

With a Chapter 7 bankruptcy, your credit card debt may be erased. That’s true unless you incurred credit card debt as a consequence of fraud or if you used the credit card to acquire possessions for which the creditor has a security interest, including jewelry or luxury items.

Frequently Asked Questions

Why is it important to get out of credit card debt?

It’s smart to dig out of mounting credit card debt because your credit card charges interest that compounds every time you carry over a balance from month to month. You may end up paying much more over time when you carry a balance than if you would have paid off that credit card in full punctually or over a shorter period. Additionally, late and insufficient minimum payments on credit cards can dramatically hamper your credit rating and lower your credit score. That can make it more difficult to qualify for future credit.

Can you declare bankruptcy for credit card debt?

Yes, bankruptcy is an option if you are in over your head with credit card debt. You can explore a Chapter 7 or Chapter 13 bankruptcy. With Chapter 7, your credit card debt may be wiped clean, except if you incurred credit card debt due to fraud or if you used the credit card to purchase goods that the creditor has a security interest in, such as luxury items or jewelry. 

With Chapter 13, you are required to pay off your debts, but you are allowed to reorganize them under the guidance of a federal court. You can be granted a three- to five-year schedule to repay your debts. However, secured debts like a home or car loan must be paid off first, while unsecured debts, which include credit card debt, are lower on the repayment priority list.

How do you consolidate credit card debt?

You can consolidate credit card debt by combining all of your credit card balances into a single consolidated loan. Here, you’ll only have to make a single monthly payment versus multiple credit card payments, making for a streamlined payoff strategy. A debt consolidation loan will likely come with a much lower interest rate than your credit card would charge.

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