According to the Federal Reserve, the total credit card debt in America is enough to create a $5,517 balance per household. Among just those carrying debt, the average balance is $16,048, with roughly half of households carrying a regular credit card balance. Circumstances often force people to use credit cards to finance their lifestyles, though this “strategy” can lead to significant levels of debt and low chances for repayment.

Let’s look at some of the costs of credit card debt and what you can do about it.

The financing costs are high

With the average APR on a credit card over 20%, that means the “debt service” cost on the average household’s debt is over $3,000. This is the amount the debt will grow assuming no other spending on the cards takes place. If the debt service costs exceed the minimum payment, this cost will continue to grow even if you never spend again. Interest rates, though, are only the tip of the iceberg.

Credit card companies can also stack late fees, collection fees, and other miscellaneous charges. These fees then contribute to the debt load and are charged interest at the same rate. Carrying high amounts of long-term credit card debt is among the worst things you can do for your personal financial health.

The hidden costs are high

One of the biggest factors in determining your credit score is a figure called your “debt utilization ratio.” This is the percentage of your available credit currently being used. Say you have a credit limit of $5,000 and you carry a balance of $2,500. That means your debt utilization ratio is 50%. A good debt utilization ratio benchmark is anything under 30%. A high utilization ratio can negatively impact your credit score, making it more difficult to get other kinds of credit (such as an auto loan or home mortgage).

A lower credit score also translates into higher interest for unsecured loans, like credit cards. This increase in cost eats up your credit limit faster, driving your credit score down, and contributing to even more debt.

Not only does it hurt you financially, but many employers now use credit checking to assess the trustworthiness and long-term planning of a potential employee. Having a low credit score could cost you a chance at your dream job.

Your credit union can help

Habitual credit card users often fall into a trap, charging a great deal to one card then signing up for another to take advantage of low interest rates on balance transfers. This can create a ball of revolving debt with seemingly no way out.

Fortunately, Notre Dame FCU’s Financial Physicians can help you get out of the crushing cycle of revolving credit card debt. A debt consolidation loan can repair your credit score, consolidating monthly bills into one payment with a lower interest rate. With a debt consolidation loan, you can pay off pesky credit card debt and walk away with an improved financial history—and best of all, no debt.

Debt consolidation loans aren’t always the silver bullet to financial problems. They work in conjunction with credit counseling, financial education, and budgeting to get you on the path to financial well-being. Contact Notre Dame FCU at 800-522-6611 and schedule a check up with a Financial Physician and create a plan to eliminate your debt.