With Americans' credit card debt mounting, Ted Rossman, senior analyst for Bankrate.com, stopped by the Cheddar News studio to offer some tips on how to pay down debt. 

<div class="block">With Americans&#39; credit card debt mounting, Ted Rossman, senior analyst for Bankrate.com, stopped by the Cheddar News studio to offer some tips on how to pay down debt. </div>

Wake Up With Cheddar

Stretching Your Dollar: Tips for Paying Down Credit Card Debt

Welcome back. Friends news. I and I'm Hanna do and now to stretching your dollar according to a recent report from the Federal Reserve Bank of New York Americans have an incredible $986 billion in credit card debt. So how do you tackle your credit card debt? Well, to give us some advice, joining us now we have Ted Rossman senior industry analyst at bank rate dot com. Welcome back. So first and foremost, what are some common reasons? People fall into credit card debt. The biggest explanation is some sort of emergency expense, some sort of unexpected medical bill, car repair, home repair, something like that. A close second is day to day expenses. And I feel like that's really taken center stage this past year with inflation being so high. Yeah, and a lot of people will say, ok, I'll just pay maybe the minimum every single month and and and obviously the balance continues to occur over time. But why you say that that's not true. That's not really enough to just pay the minimum balance every month. The minimum payment is enough to keep you current in the eyes of your creditors and the Credit Bureaus, but it's not enough to make progress. The typical formula is 1% of the balance plus interest. So you're gonna be in debt forever and ever, ever. Like if you have the average balance, 5700 bucks according to Transunion at the average rate, which is a little over 20% minimum payments will keep you in debt for 17 years and you'll pay about $8300 in interest. And that math is rough and that's if you're not accruing more and adding more to the credit card, you know. Very true. Yeah, I know it's easier said than done, but it's so important to pay this down. My top tip is to get a 0% balance transfer card. Pause that interest clock for up to 21 months. Move your existing high cost debt over to one of these new cards. Try to avoid making new purchases to your earlier point divide what you owe by the number of months in your 0% term. Try to stick with it. And according to a report we mentioned earlier, the delinquency rate among those ages 18 to 25 was more than 8% in the first quarter. So why are millennials and Gen Z are failing to pay their credit card bills? I think this is really a cost of living story as well because rent costs more food costs more. You know, it's really expensive to get married and raise kids and buy your first home and pay off student loans and student loans. Of course, have been on pause the last few years. I worry when those payments resume and that's probably gonna be in the next few months. That's another maybe $400 a month that people are gonna have to come up with. So it's really important to have a plan, a balance transfer card, a side hustle. There are some other things you can do. Nonprofit credit counseling can be a great avenue. Maybe a personal loan is a form of debt. So yeah, let's go through it a little bit more. Any other helpful hints for our viewers out there that wanna start chipping away right now at that credit card debt, start moving in the right direction and the other money that you can funnel towards this debt is impactful. So whether you're taking on a side hustle or you're selling stuff you don't need or you're cutting your expenses dollar saved is a dollar earned after all, try to lower your rate, get that 0% balance transfer card or maybe ask for a lower rate seek nonprofit credit counseling, use a personal loan as a form of debt consolidation. You can't just ignore the problem though and you can't just make minimum payments, you need to do more than that. So you alluded to this a moment ago when it comes to retail store, credit cards, not all are created equal, walk us through what someone should know when they're getting those credit cards. Store cards have special high interest and that's in large part because they're easier to get. But that can be a trap. So don't fall for that pitch at the check out. The only time this works is if you pay in full to avoid interest and you're loyal to the store, you shop there enough to make it worthwhile. A lot of store cards are at or even over 30% interest. So it's just so important. These are credit products. It's not just like a store loyalty program. You need to realize that it affects your credit score, it has interest. You wanna have a good plan, high interest. All right, thank you. So it's Rossman senior industry analyst at bank rate dot com. Always great advice. Thank you and more. Wake up next guys. Yeah.