View all posts

The Truth About Credit Card Debt And How To Responsibly Build Credit



If credit cards had their own relationship status on Facebook pages, we’d probably click, “It’s Complicated.”  

It’s no secret that everyday Americans enjoy the freedom of swiping at the supermarket and the convenience of online shopping. But the average balance has swelled over the years and now stands at upwards of $6,200, according to Experian. Credit card limits have also increased during the last decade by 20 percent. With working families paying interest on credit card debt, it’s vital to responsibly manage monthly payments and avoid high balances. At the same time, carrying strategic credit card debt can have a positive effect on your big-ticket borrowing ability.  

Yes, our feelings about credit cards could remain “complicated” into the foreseeable. But by making a concerted effort to focus on positive practices, it can grow into a healthy and committed relationship.  

Are you ready to check out IFCU's credit card options? Click below!

IFCU Credit Card Options


Experts in the credit reporting field point to three typical reasons that people accumulate too much credit card debt. These include unforeseen medical bills, emergencies, and regular day-to-day spending. While no one can predict unanticipated medical needs or emergencies, things can be done to rein in routine spending. These are three ways to manage credit card debt responsibly.  

Create A Budget: The “B” word tends to elude the vocabularies of those who continue to struggle with high balances. By tallying up your average monthly income and subtracting necessary expenses, you can arrive at a manageable credit card payment number. Staying within a reasonable budget remains an effective way to keep balances low.  Check out IFCU's partner resources for budgeting.

Stop Paying Only What You Can: Consumers would be wise to craft a budget that includes paying off balances on a regular basis. It’s not the end of the world if you accrue a little interest from time to time. That’s just the cost of doing business. But paying only what you can creates a perpetual credit card debt limbo. Have a plan to zero-out cards.  

Know Your Debt-To-Credit Ratio: Staying within a favorable credit utilization rate will likely lead to low, manageable balances. When utilization is balanced against income and ability to pay, you typically enjoy a positive impact on your credit score. Reporting bureaus such as Experian recommend maintaining a credit utilization ratio of under 30 percent debt to your credit limit.  Get to know more about credit scores here.

Taking proactive measures to enjoy a relationship based on moderation and responsibility can be rewarding. But for those whose balances have upticked, getting your credit card debt back in harmony is essential. 


If you are like many Americans, you’ve experienced high credit card debt at one time or another. If those balances are a tad higher than you’d prefer or exceed utilization standards used by credit bureaus, getting out of credit card debt might be easier than you realize. These are common ways to strategically lower monthly balances. 

Prioritization: Focus on lowering the balance of the account that charges the highest interest rate first. Zeroing out this card will reduce outgoing revenue to cover the interest.  

No More Minimums: Whenever possible, exceed the minimum monthly payment in an effort to lower balances at a faster rate.  

Found Money: Consider looking at fling spending, such as the expensive latte you buy too often. Cutting back on unnecessary spending is a way to find extra money to apply to credit card debt. ? 

Snowball Technique: Once you have established a zero balance on one card, apply its monthly budgeted payment to the one with the next highest interest rate.  

Automatic Payments: Consider opening a bank account for the sole purpose of facilitating automatic credit card payments. You can make electronic deposits and set it to pay on time, thus avoiding late fees. One caveat might be not to keep a bank card for this account. Why entice yourself to use a new card? Or set up automatic payments to pay your credit card through online bill pay.  

Although we often have mixed feelings about our relationship with credit card debt, it’s important to keep in mind that responsible management helps improve scores. Because credit cards create an ongoing payment history, they provide reporting bureaus with significant data. By making on-time payments and embracing utilization expectations, your healthy credit card relationship can lead to improved credit scores and robust benefits. It doesn’t have to complicated.  

Ready to check out IFCU's credit card options? Maybe you are looking to build credit, or looking for a card that fits you better. You may be surprised about all the benefits. Click below.

IFCU Credit Card Options