How to Free Yourself From Credit Card Debt Javascript must be enabled to use this site. Please enable Javascript in your browser and try again. × Search search POPULAR SEARCHES SUGGESTED LINKS Join AARP for just $9 per year when you sign up for a 5-year term. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. Leaving AARP.org Website You are now leaving AARP.org and going to a website that is not operated by AARP. A different privacy policy and terms of service will apply.

How to Free Yourself From Credit Card Debt

4 strategies to reduce stress and pay down balances

Chris Gash Add burdensome credit card debt to the list of woes the pandemic has made worse for older Americans. New surveys confirm what your letters have already told me: Many of you are struggling to make monthly payments while balances grow. And even those of you who aren't struggling are carrying more of this debt, and paying more interest, than you were before. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. So, burn debt we must. If you're carrying $5,000 at current rates of just over 16 percent, you're paying about $67 a month in interest. That gets in the way of everything else you want to do, including sleep soundly. I'll assume you've to pay down the balance — held a yard sale, taken on a side gig, sold a car, or used part of a tax refund or stimulus check. That's good, since every extra dollar you pay beyond the minimum is a dollar on which you won't be paying interest. But if you're still in trouble, you haven't run out of options. Lenders understand that household budgets have been squished, and there are signs of both increased forbearance and new card offers that can make it easier to get back to zero. Before I get to options you might have, I'll make one important point: Don't miss or delay minimum payments while you plot your strategy. Doing so will lower your and take some of the best solutions off the table. With that said, here are four distinct ways to work it now. AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. Entertainment $3 off popcorn and soft drink combos See more Entertainment offers >

2 Ask for a break

COVID has made . Since the beginning of 2020, roughly 83 percent of people who asked for a rate cut got it, LendingTree reports. Many issuers have had special programs for struggling cardholders, said Bruce McClary of the . He says to tell your lender that the coronavirus affected your finances and that you intend to keep up your payments and reduce your balances, but that more affordable terms would help. Your issuer might lower your interest rate for six to nine months, he says.

3 Refinance with a personal loan

Ask your credit union or bank if you can roll all your card debt into one lower-interest loan. The average rate on a two-year from a bank was under 10 percent at the end of 2020, according to the Federal Reserve. That may be a better deal than you can get from your card issuer. Don't borrow against your home or your car to pay off your card; that creates a new risk of losing your possessions. And don't grab at “debt consolidation loans” from companies you've never heard of. Chances are too high that they'll load you up with new fees or, worse, scam you. AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. , which you can find through NFCC.org. At no cost, a counselor will go over your income and debts and determine what's workable. Then the counselor will negotiate with your lenders, typically getting their buy-in on a payment plan that will lower your interest and monthly payments and maybe forgive some debt. If you reject the plan, you're no worse off than you were before. Accept it, and you'll start making one monthly payment to the counseling service, which will in turn pay the issuers. You'll likely pay a small fee and give up the cards included in the plan. But over time you'll be able to repay debt and rebuild credit. More importantly, you'll be able to shed the burden and the worry of your debt. Linda Stern, former Wall Street editor for Reuters, has been covering personal finance since the 1980s. More on money AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. AARP VALUE & MEMBER BENEFITS See more Health & Wellness offers > See more Flights & Vacation Packages offers > See more Finances offers > See more Health & Wellness offers > SAVE MONEY WITH THESE LIMITED-TIME OFFERS