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How to Pay Off That Pandemic Credit Card Debt

Credit card use has increased as the nation continues to work its way out of the pandemic.

According to the Federal Reserve Bank of New York, credit card bills rose $17 billion in both the second and third quarters of 2021.

That’s some serious coinage owed to banks and financial companies.

The increased debt is widespread, and goes back to the beginnings of the pandemic in early 2020. A Bankrate survey showed that 42% of Americans with credit card debt have increased their balances since the beginning of the pandemic. Almost one in five of those with credit card debt, have balances of $20,000 or more.

The good news for those facing crushing credit card debt is there are steps that can whittle away at the debt, and eventually eliminate the problem.

Tips for Eliminating Pandemic Credit Card Debt

One of the first things to do is to simply understand the root cause of the problem. How did the debt get to that level? Was it a misuse of a credit card? A one-time expense of a costly item? Using the card to pay medical bills?

Freeing yourself from the debt takes commitment and acknowledgement of the problem. Here are a few steps anyone can take to eliminate hefty credit card debt.

1. Stop Using the Cards

This obviously is a common-sense solution. If you stop adding to your debt, you should be able to pay it down much faster. The bonus would be if your card company reduced the interest rate it charges while you reduce debt every month.

2. Assess Your Budget

If you are spending more than you make, you have what is called negative cash flow. Look at your spending and see what expenses are necessary (food, housing, utilities) and what can be cut (new clothing, eating out every day, the extra streaming channels). At the end of every month, commit any leftover money to paying down credit card debt.

3. Stick to the Budget

There’s a reason it’s called “working” your way out of debt. It takes commitment and perseverance. Ordering up food processors while watching The Home Shopping Network is counterproductive to eliminating debt. Going a month where every meal is prepared at home, is a productive step for eliminating debt. Make good choices and stick to your budget.

4. Talk to a Credit Counselor

A nonprofit credit counseling agency can connect you with someone who may be able to consolidate your credit card debt at a lower interest rate. It’s called a debt management program. You pay less interest on your credit card debt – the goal is 8% or lower – and make affordable monthly payments based on your income. This step typically leads to the debt being paid off in 3-5 years. This not only gets you out of debt but could improve your credit score.

5. Nonprofit Debt Settlement

Nonprofit debt settlement is a new program offered at a few nonprofit credit counseling agencies, including InCharge Debt Solutions. Lenders agree upfront to forgive the remaining balance after you have paid 50%-60% of the debt. You make fixed payments for 36 months and the debt is eliminated. This could have a negative impact on your credit score, but you pay less than what you owed and the debt is eliminated in 36 months.

6. Consider the Island Approach

A quirky term for using the credit card system to your advantage. If you qualify for a 0% balance transfer card, take it! Use the introductory period – usually 12-18 months – to pay off your debt at 0% interest. Be sure to meet the terms of the new card, otherwise you’ll just be rearranging the deck chairs.

7. Repay the Most Expensive Debt First

Called the “avalanche method,” this means putting the majority of your money toward the balance with the highest interest cost. When you pay off that card, move on to the card with the next-highest balance and pay it down.

8. Evaluate Your Work Status

If it’s possible to increase your income by adding a second job? That “new money” could be used to pay down the credit card debt.

9. File for Bankruptcy

This is a last resort given its impact on your borrowing and credit score. But if the debt is overwhelming – and you don’t see a way to pay it off in five years – bankruptcy could be the second chance you need to get back on your feet financially.

Bottom Line

Of all the options, the potential benefits of talking with a credit counselor can’t be understated. One of the most important things a counselor does is listen to your story, then present options to solve your problem. They can help consumers understand credit card debt and how to eliminate it.

Careful budgeting might even show a consumer that they have more money available each month to commit to the debt. Sounds simple, but some people truly don’t grasp that reality until they sit down with a neutral third party who can lay it out for them.

Some people are scared by credit card companies; they hear the phone ring and are afraid to answer. They need someone to make it all stop.

That’s what credit counselors do. They work with card companies to find a solution that benefits both sides. Call one and see if it works for you.

In addition to credit card help, they may refer you to other COVID financial assistance programs such as foreclosure prevention counseling and eviction help. These programs are designed to help families learn about their options when facing foreclosure or eviction and then take action.


Michael Leon

Michael Leon is InCharge Debt Solution's Senior Director of Operations. InCharge is a 501(c)3 nonprofit credit counseling agency that is dedicated to helping people achieve financial health and wellness and find debt relief solutions.

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    1. N.A. (2021, November 9) Total Household Debt Climbs to Over $15 Trillion in Q3 2021, Driven by New Extensions of Credit. Retrieved from
    2. Delgado, M. (2021, September 13) The Pandemic Has Plunged Americans Into Severe Credit Card Debt: 2021 Data. Retrieved from
    3. Taylor, C. (2021, September 27) As Americans spend, credit card debt is ticking back up, Retrieved from
    4. Johnson, A. (2021, September 27) Poll: COVID-19 causes debt surge for some consumers. Retrieved from