Americans collectively owe over $1 trillion in credit card debt, with Gen X carrying the highest average balance at $9,123. This generation, defined as those between the ages of 43 and 58, has the highest average credit card balance compared to other generational cohorts. On an individual level, the overall average balance is around $6,501, with millennials and Gen Zers also seeing increases in their credit card balances in the last quarter of 2023. Factors such as higher costs of living and rising credit card interest rates may be contributing to the rise in credit card debt among all generations.
If you find yourself struggling to pay down your credit card debt, it’s important to first get a clear picture of your finances by assessing how much you owe on your credit cards and how much you earn each month. Once you have a better understanding of your financial situation, you can begin to craft a plan to tackle your debt. Two popular strategies to consider are the snowball method and the avalanche method. The snowball method involves paying off the card with the smallest balance first, while the avalanche method focuses on paying off the card with the highest interest rate to minimize costly interest charges over time.
Regardless of which strategy you choose, the key is to get started on addressing your credit card debt sooner rather than later. According to Matt Schulz, chief credit analyst at LendingTree, there is no one-size-fits-all answer for which method is best, and the most important thing is to find an approach that will keep you motivated until the end. If you’re looking to make extra money outside of your day job, consider signing up for CNBC’s online course on How to Earn Passive Income Online for tips and real-life success stories. Additionally, sign up for CNBC Make It’s newsletter to receive more tips and tricks for success at work, with money, and in life.
