PHILADELPHIA (WPVI) — If your post-holiday credit card bill is through the roof, you’re not alone. Americans added $50 billion to their credit card balances last year, according to WalletHub, and are starting 2026 with an average balance of about $6,523, according to TransUnion.
With average credit card interest at a staggering 22.83%, now is the time to prioritize a payoff plan.
“The number one thing you want to do is make your payments on time, and ideally in full,” said Courtney Alev of Credit Karma. “Make sure you’re not missing a bill. I love setting everything up on auto pay so you can just kind of set it and forget it.”
A missed payment can damage a credit score, which affects access to an apartment, a mortgage, an auto loan rate and even cell phone plan pricing.
Using too much available credit each month can also drag down a score.
“The other thing is making sure that you’re not using too much of your available credit, really relying on credit or debt each month, because that is going to cause your credit score to drop,” Alev said. “So we recommend keeping your usage of the available credit under 30%, ideally under 10”.
There are two common payoff methods that are best to use.
Snowball strategy: Focus extra payments on the smallest balance first while paying minimums on others. Each quick win can build momentum and confidence.
Avalanche approach: Target the highest interest balance first to save more on interest over time, potentially accelerating overall payoff.
Whichever method you use, also call your credit card company to negotiate a lower rate. Even a 1% to 2% reduction can meaningfully cut interest costs over the life of a balance.
Also, you must pay more than the monthly minimum to make progress.
Get out that shovel to dig out of debt, and get to work to hit the re-start button on your finances.
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