Quick Answer: If debt is taking over your paycheck, aim to keep total debt payments under 36 percent of your income. Prioritize budgeting, cutting costs, and exploring debt relief or consolidation to regain control.

According to Experian, the average American carried a credit card balance of $6,730 in 2024 — a 3.5 percent increase from $6,501 in the third quarter of 2023. But how much credit card debt is too much? Most financial experts recommend keeping total monthly debt payments below 36 percent of your income including credit cards, auto loans and personal loans. Going beyond that threshold can signal financial stress, particularly if you’re relying on credit cards to cover essentials or struggling to pay off balances in full. CCCU shares smart strategies to help you regain financial control.

Recognize the Red Flags

Are you only making minimum payments or using one card to pay another? These are signs you might be drowning in debt. It’s crucial to understand your entire financial picture. Start by listing all income sources and tracking both fixed and variable expenses. Subtract expenses from income to find what you can allocate to pay off debt.

• Strategies to Pay Off Debt
  Use budgeting tools to cut unnecessary spending.
• Follow a method like the debt snowball (paying off the smallest debts first) or the debt avalanche (paying off the highest interest rate debts first).
• Stay motivated by tracking your progress and you’ll start to see positive changes in your spending habits and move closer to your financial goal of keeping your debt below 36 percent threshold.
• Use our free Debt Payoff Calculator to estimate how quickly you can become debt-free with a personalized repayment plan.

Consolidate and Save

Debt consolidation can reduce interest and simplify your finances. Whether through a personal loan or a home equity line of credit, it’s vital to review terms carefully especially when your home or car is collateral.

If you’re wondering whether debt consolidation is the right move, read our blog on the pros and cons to help you decide.

Seek Help Before it’s Too Late

If you’re overwhelmed by credit card debt, don’t wait to ask for help. A trusted financial advisor or your local credit union can guide you through personalized solutions such as budgeting assistance, debt management plans or consolidation options.

Let CCCU Help You Tackle Debt Head-On

Managing credit card debt is tough but you don’t have to face it alone. CCCU is here to help you with personalized financial solutions to overcome debt and reclaim peace of mind. Visit www.CCCULV.org or speak to one of our financial representatives at 702-228-2228. Let’s take the first step toward your debt-free future together!

For more tips and tools on managing debt, visit CCCU’s Banzai Wellness Center, where you’ll find helpful articles, calculators and resources designed to support your financial journey.