How Long Does it Take an Average Person to Pay Off Their Credit Card Debt?

Unfortunately, paying off credit card debt is not always a simple and straightforward process -- especially when all you can make is the minimum payment each month. Continuous use of the card while trying to pay it off further complicates the matter. Examine how long it can take the average person to pay off credit card debt to understand the importance of a debt payoff strategy.

The average American carries about $4,200 in credit card debt. Consumers use credit card funds for everything from emergencies to buying gas and food. The best practice to avoid piling up credit card debt is to pay off the balance in full each month. Otherwise you must meet the minimum payment requirements of the creditor, which starts at about 2 percent of the balance.


   
Downsides of Credit Card Debt

Choosing to carry a credit card debt balance for a long term could negatively affect your ability to get other forms of credit. For example, mortgage lenders look at your debt-to-income ratio when evaluating you for a mortgage loan. The more credit card debt you have, the higher that ratio, which lowers your chance of approval. Credit card debt is also very costly in terms of the average rates and fees. Some creditors charge as much as 79.9 percent annually.
   
Average Time to Payoff

The average amount of time it takes to pay off debt varies according to the account holder's rate, balance and spending habits. The average credit card rate is about 14.72 percent (estimate as of 2011) and as discussed, the average person has about $4,200 of credit card debt (estimate as of 2011). Based on those figures (and assuming a minimum payment of 2 percent of the balance) making the minimum payment each month would take more than 24 years to pay off. Technically the debt can persist forever if the account holder continues to use the card.
   
Suggestions

 Determine how long it will take for you to pay off your own credit card debt using the Bankrate minimum payment calculator. Then take every step possible to reduce the amount of time it will take you to pay off your credit card debt. One way is to enact a debt payoff strategy that requires you to pay more than your required payment each month. The more extra principal you pay each month over the minimum, the less time it will take to achieve a zero balance. Another strategy to pay off the credit card early is to consolidate the debt into a lower interest account, such as a refinanced mortgage loan. Consult a financial counselor for advice before taking that step.

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