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Here are some strategies to pay off that big credit card debt

  • Overall, credit card debt has declined in the Covid pandemic.
  • But for many people, their balances are only growing and it can be hard to see a way out.
  • These steps can help.

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It's yet another example of how the pandemic's economic recovery has been uneven: While overall credit card debt is on the decline, others are seeing their balances mushroom into huge figures.

Money Management International, a nonprofit credit counseling agency, recently analyzed the credit card balances of renters who sought financial assistance from the organization. Renters have been particularly hard-hit by the pandemic, and federal aid allocated by Congress to address their crisis has been painfully slow to reach households. More than a third of Americans are renters.

The typical renter seeking the agency's help carried around $3,000 in credit card debt in 2019, Money Management International found. The average balance so far in 2021 is closer to $25,000.

Others agencies that help those financially struggling report the same.

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"We do see people who have $20,000, $30,000 and $40,000 in credit card debt," said Bruce McClary, a spokesman for the National Foundation for Credit Counseling.

Balances that high can take decades to pay off, experts say.

If someone made only the minimum monthly payments on a credit card with a $25,000 balance, charging the average annual rate of 16.22%, it would take them nearly 30 years to be free of that debt, and they'll have paid more than $32,500 in interest by the end, according to an example provided by Ted Rossman, industry analyst at CreditCards.com.

The minimum payment on that balance would begin at around $588 a month, and would decrease over time as the balance dwindled.

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