Despite an improving economy, Americans believe it is becoming more difficult to get rid of debt.
Almost one in five Americans with debt, or 18 percent, think they will never get out from under it, according to a new CreditCards.com report. This is up from the 9 percent who felt that way the last time CreditCards.com asked the question, in May 2013.
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Debt, in this context, includes credit card balances, car loans, student loans and home mortgages.
Even consumers who believe they can become debt free say it will take a long time to do so. On average, Americans expect to be debt free at age 53, while 43 percent of people with debt expect to remain in debt at age 61 or older.
“It’s easy to feel paralyzed when you’re overload with debt and feel like you’ll never get out, but the worst thing you can do is nothing,” said Matt Schulz, CreditCards.com’s senior industry analyst.
The holiday season is usually a tricky time of the year for debt: We tend to increase it right about now. More than a third of Americans, or 38 percent, have already incurred debt this holiday season, according to Creditcards.com.
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However, there is good news. Fifty-five percent of those who have already incurred debt this season said they will eliminate it within one month, while 74 percent expect to pay it down within the next three months.
Additionally, some current positive economic trends are helping Americans pay down their debt loads. A CNBC All-America Economic survey released Tuesday found that 25 percent of Americans are using savings from low gas prices to pay down their debt.
Here are other tips for paying down debt:
- Get your spending in check by tracking every bit of it.
- Create a realistic budget and stick to it.
- Take a break from using credit cards.
- Negotiate lower interest rates on your credit card.
- Transfer balances to a low-interest card.
Some debt, of course, is better than others. While it’s wise to eliminate debt with the highest interest rates, such as credit card debt, having a low-rate mortgage isn’t as damaging to your finances.
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“The goal is to free up money so you can send as much money as possible to your creditors,” CreditCards.com noted. Working with an accredited credit counselor is also a good idea.
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