Why Credit Card holders find it difficult to escape debt? 7 strategies to get out of debt trap, ensure quick repayment
Many cardholders find themselves trapped in the cycle of debt as they carry a balance on a credit card from month to month only deepens debt. Findings from a survey reveal that many cardholders only pay the minimum amount on their credit cards while the interest accumulates. This not only becomes a cost addition but also a stretch repayment, making it difficult over time to meaningfully reduce the balance.
A recent LendingTree survey suggested that about 41% of US credit cardholders only pay the minimum amount on at least one of their credit cards with this percentage rising to 58% among Gen Z – “a recipe for staying mired in debt.” It drops to 19% among Baby Boomers. An evaluation of more than 1,500 cardholders revealed that a US cardholder with debt carries a $7,756 balance. With the average Annual Percentage Rate (APR) on current card being 20.94%, a borrower will continue to stay indebted for nearly 27 years and pay nearly $13,000 in interest.
7 strategies to get out of debt trap
The main purpose a credit card should typically serve is to allow the borrower to afford an expense in view of future income, repay balance in full each month when the salary arrives. Here are some tips to get out of credit card debt trap.
