As the economy continues to recover and Americans adjust to the lasting effects of the COVID-19 pandemic, many households are still struggling with credit card debt, medical debt, and other financial obligations. For millions, credit card balances are particularly difficult to manage, especially when interest keeps compounding and the monthly payment offers little relief.
If you’re facing financial trouble, especially related to credit cards, it’s essential to act strategically and responsibly. Here’s how you can regain control of your personal finance and work toward becoming debt-free, even in tough times.
Avoid using your credit card as a temporary substitute for income. When you borrow money for everyday expenses like groceries or streaming services, you’re increasing your monthly debt payments and setting yourself up for more financial stress later.
If you’re already struggling, take immediate steps to avoid racking up more debt. Focus on essentials and try not to pay interest on unnecessary purchases. Remember: using credit wisely now will protect your financial future.
Now more than ever, a realistic budget is a helpful tool. Track your monthly spending and separate essentials from non-essentials. Reduce spending where possible—swap premium brands for generic, cut back on streaming services, and brew your own coffee instead of buying it.
If you're spending less, you’ll have extra money to tackle your debts. The goal is to free up cash that can go toward your highest interest rate card debt or other high-priority bills.
An effective budget should leave extra money for retirement savings while still paying credit card debts. Learn how to budget from Credit.org's free FIT Academy.
Even if you’re no longer actively using your cards, keeping your credit card accounts open helps maintain your credit limit and reduces your credit utilization, which is a key part of your credit report. Unless a debt management plan specifically requires you to close accounts, leave them open and focus on lowering balances.
If an account carries a high annual fee and you're no longer using it, consider closing it—but only once it’s paid off in full to avoid hurting your payment history.
Related: What to do if you have too many credit cards
If you're having trouble paying, don’t delay—call your credit card company or other lenders. Many companies offer relief programs during emergencies, such as reduced interest rates, waived late fees, or temporary payment deferrals.
It’s better to ask for help than to fall behind. Keep are cord of your conversations, including the payment schedule or any agreed-upon terms.
While you should always aim to pay more than the minimum payment, during hard times, it’s okay to pay the minimum—as long as you do it on time. Missing payments can hurt your credit report and lead to extra fees and higher interest.
If you’re able, use methods like the debt snowball or snowball method—paying off the smallest balance first—to build momentum and reduce the number of accounts you owe money to.
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There are many credit counseling organizations that can help you navigate tough financial situations. Look for those approved by HUD and the COA. Certified credit counselors can work with you to create a personalized plan, help you consolidate into one monthly payment, and potentially lower your interest rates through a structured debt management plan.
Be cautious of any debt settlement company promising quick fixes. While debt settlement may be an option, it often comes with extra fees and risks to your credit.
Avoid using a home equity line, mortgage payments, or student loans to pay off credit card debt. You could be jeopardizing long-term financial stability for short-term relief. Similarly, be wary of using a debt consolidation loan, which may offer a lower interest rate but uses new debt as a quick fix. A balance transfer is another way you might be tempted to address credit card debt, but try to avoid new borrowing at all.
Rather than use debt to handle credit card bills, consider a debt management plan. Credit counselors have debt consolidation options that will help you get out of debt without trading your savings, opening a new account and pay your bills with the minimum payment possible while addressing all of your credit card debt.
Learn more: Good Debt vs. Bad Debt
If you’re deciding between which bills to pay, cover essentials like mortgage payments, car insurance, utilities, taxes, and car loan obligations first. Unpaid credit card bills are serious, but losing your home or car can be even more devastating.
If needed, create a payment plan or seek legal advice for managing how much debt you owe. A solid money management approach helps prevent falling behind on critical obligations.
Even as you work to get out of debt, don’t forget about your savings and retirement savings. Use tools and strategies that help you balance debt repayment with long-term saving goals.
If you’re looking for data to guide your strategy, microeconomic data from trusted sources like the Federal Reserve Bank can provide insight into national trends in credit, interest, and consumer behavior.
While managing credit card debt during uncertain times can be overwhelming, it's not impossible. A realistic plan, disciplined spending, and the right support from counseling organizations can help you pay off debt faster, avoid taking on more debt, and improve your financial situation for good.
Start by evaluating your options and making the first move toward a more stable financial future.
No matter how tough our situation seems, it’s possible to find a path forward that keeps your finances intact without destroying your credit score. Talk to a certified debt counselor for free, confidential advice based on your unique situation.
