Lugging Credit Card Debt Into 2024? Now’s the Time to Make a Plan.

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Most Americans with card debt have not outlined a way to bring it down, a new report says. There are ways to get help.

As 2024 dawns, Americans’ credit card debt and late payments are rising, and card interest rates remain high, but many people lack a plan to pay down their debt. If your balances are ballooning, a New Year’s resolution to tackle them would be timely.

After clearing the $1 trillion mark last spring, credit card debt has continued to mount, rising 4.7 percent in the third quarter to $1.08 trillion, the Federal Reserve Bank of New York reported.

Card debt fell during the pandemic period of 2020-21 but rose as Americans turned to credit to cover expenses amid rising prices. Card debt is growing even as inflation cools and the job market remains resilient.

Delinquencies are also on the rise. Two percent of card users went from being current on payments in the second quarter of 2023 to being 30 or more days late in the third quarter, up from 1.7 percent in the first half of the year. Borrowers who also had car loans and student loans, in particular, were more likely to fall behind on their credit card payments, Fed researchers reported.

Despite rising debt, fewer than half of cardholders who carry a balance say they have a plan for paying it off, according to a survey published this week by the financial site Bankrate. Nearly half those surveyed said they carried a balance, up from 39 percent in 2021. That’s worrying, analysts say, because the Fed reported that the average interest rate was above 22 percent for cards that assessed interest.

“I think it’s a big concern,” said Ted Rossman, senior industry analyst at Bankrate. At 22 percent, it would take almost nine years to pay off a $2,000 card balance by making minimum monthly payments, and total interest would exceed $2,100, Mr. Rossman said.

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