3 Things Stopping You From Paying Off Credit Cards and Other Debt

GOBankingRates’ recent National Debt Survey of approximately 1,000 American adults found that the top three reasons that stand in the way of people paying off their credit cards and other debt are as follows:

• Too little income: 41%
• Too many other bills/expenses: 32%
• Too hard to keep up with because interest rates keep increasing their debt: 22%

If you’re in the same boat, here’s advice from financial experts that can help you tackle your debt once and for all .

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What To Do If Your Income Isn’t Enough To Pay Off Debt

Erika Kullberg, founder of Erika.com , attorney and personal finance expert, said that if you feel like your income is too low, you should focus on cutting expenses and finding ways to increase your income.

“Look for things you own that you could sell, do some research about ways to monetize the skills you already have and focus on long-term improvement,” she suggested.

Richard Barrington, financial analyst for Credit Sesame , said that a strong job market like we have now means labor is in demand, and you should use that to your advantage by looking for opportunities to earn more.

“See if you can get a raise from your current employer,” he suggested. “Your boss probably knows that it’s hard to find new people. If you’ve been a reliable employee, chances are your boss would rather bump your wage a bit rather than have to recruit and train a new person.”

Another option Barrington suggested is to ask to work extra hours at your current employer.

“Given the labor shortage, many companies are short-handed,” he said. “Working overtime not only adds to the hours included in your paycheck, but it may also qualify you for a higher pay rate.”

Barrington also said you can look for higher-paying opportunities elsewhere.

“Again, the labor shortage is a key factor in your favor,” he said. “Employers are competing for talent. This is an excellent time to look for better-paying jobs that match your skill set.”

Finally, if you’re not in the position to get a raise, work more hours or look for another job, Barrington suggested taking on a side hustle . He said that with more jobs allowing people to work from home, it’s never been easier to find some extra work to add to your main job.

“It may not be easy, but look at it this way: you shouldn’t have to work two jobs forever,” he said. “Just doing it long enough to pay off your debt could give your budget enough breathing room for you to go back to one job.”

What To Do If You Have Too Many Bills or Other Expenses

Kullberg said that prioritizing your essential expenses is the key. She also recommended scouring your account to look for unnecessary spending that you can cut out.

“Even reducing a couple of costs for a few months could help you get a foothold,” she said. “You can also think about negotiating a lower interest rate, or even consolidating high-interest debt if that’s an option.”

Barrington had a similar suggestion: zero-based budgeting. He explained that instead of just trying to tweak your current spending habits, you start completely from scratch and figure out what things you really can’t live without. Then cut out all your other spending.

“This may mean making some sacrifices, but look at it this way: if you can’t pay your bills, some things are going to get cut out of your lifestyle anyway,” he said. “It will be easier if you choose which things to cut before those choices get forced upon you.”

According to Barrington, the sacrifices don’t have to be permanent.

“Paying down debt should start to clear room in your budget,” he said. “That will ultimately allow you to bring back some of the things you cut out of your spending — unless you’ve found you really don’t miss them that much.”

What To Do If Interest Charges Keep Increasing Your Debt

“Credit negotiations, debt consolidation loans and balance transfers are all solid options here,” suggested Kullberg. “Because we’ve been in such a squeeze in terms of rising rates and the wider economy, your lender may be more open to the possibility of renegotiation. And reducing your interest through balance transfer to a lower-interest credit card can be an extremely helpful avenue if that’s available to you.”

Barrington said that if interest charges keep increasing your debt, you should seriously consider being aggressive about tackling your debt.

“It’s often those interest charges that keep people on the hamster wheel of debt — running hard to keep up but not actually getting anywhere,” he explained. “Ultimately, with interest rates rising the best way to pay less interest is to reduce the amount you owe.”

Barrington acknowledged that paying off your debt aggressively is easier said than done and offered the following suggestions.

• Prioritize your payments. Any extra money should go toward paying down the debt with the highest interest rate first.
• Shop around for lower-interest credit cards, so using credit won’t be as expensive.
• Refinance debt into lower-interest options. Balance-transfer credit cards and personal loans may give you an opportunity to replace high-interest credit card balances into lower-cost debt.
• Work on your credit. Improving your credit score can qualify you for better interest rates, even when rates generally are rising.

“Reducing borrowing costs is a key to debt reduction,” said Barrington “It will mean that more of each payment goes to reducing what you owe, instead of to paying interest charges. This will allow your pace of debt reduction to accelerate over time.”

This article originally appeared on GOBankingRates.com : 3 Things Stopping You From Paying Off Credit Cards and Other Debt