LendingTree reveals that nearly half of U.S. cardholders make only minimum payments, with younger borrowers especially vulnerable to prolonged debt cycles. Experts suggest strategic repayment methods to reduce costs and accelerate debt clearance.
Carrying a credit card balance month after month can become expensive very quickly, especially when only the minimum due is paid. LendingTree found that 41% of U.S. cardholders typically make only the minimum payment on at least one card, a habit that rises to nearly 60% among Gen Z. That pattern can leave borrowers paying interest for years and sharply increase the total cost of borrowing.
The scale of the problem is clear in LendingTree’s wider analysis, which found that cardholders with credit card debt owed an average of $7,756. At an average annual percentage rate of 20.94%, that balance could take about 27 years to clear and generate nearly $13,000 in interest. In other words, the minimum payment may keep an account current, but it does little to reduce the debt itself.
For borrowers trying to get ahead, the first step is to pay more than the minimum whenever possible. Extra payments go straight at the principal, which reduces the amount on which interest is charged. Another option is to convert a revolving balance into fixed monthly instalments, either through the card issuer or by using a lower-rate personal loan. Both approaches can make repayment more predictable and, in some cases, less costly.
Automation can also help. Setting up automatic payments reduces the risk of missing a due date and triggering late fees, provided there is enough money in the account to cover the transfer. For people juggling several debts, the snowball method and avalanche method are two common approaches. The snowball method focuses on the smallest balance first to build momentum, while the avalanche method targets the highest-interest debt first to cut costs more efficiently.
Just as important is preventing the balance from growing again. That means tightening discretionary spending, setting a budget and resisting new charges while the existing debt is being paid down. Some consumers also find it easier to switch everyday spending to cash, which can make overspending more visible and limit the temptation to lean on plastic. Used together, these tactics can help borrowers escape a debt cycle that otherwise becomes harder to break each month.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
