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American households are facing another challenge as credit card debt continues to increase. With more money tied up in revolving balances, the interest charged on unpaid amounts can make it increasingly difficult for consumers to keep up with their monthly expenses.
The Federal Reserve Bank of New York reported that credit card balances reached $1.285 trillion in the third quarter of 2026, an increase of $22 billion from the previous quarter and $52 billion compared with the same period in 2025.
Outstanding balances on U.S. bankcards reached $1.13 trillion in September 2026, up 3.9% from a year earlier.
Meanwhile, Federal Reserve data show that the average interest rate on credit card accounts assessed interest stood at 22.36% in September 2026, while the average across all credit card accounts was 21.19%. This combination of rising balances and expensive borrowing makes it important for consumers to understand how they can reduce the cost of their debt.
Why credit card interest can make debt harder to repay
Credit cards allow consumers to spread payments over time, but carrying a balance from one billing cycle to another comes at a cost.
When cardholders do not pay their full statement balance by the due date, interest can accumulate on the remaining amount. The higher the annual percentage rate (APR), the more expensive it becomes to carry that debt.
The Federal Reserve’s G.19 report tracks revolving consumer credit and publishes average interest rates charged by credit card plans. In September 2026, the average rate across all accounts was 21.19%, while accounts actually assessed interest had an average rate of 22.36%.
These are national averages, not the rate every customer pays. Individual APRs depend on the card agreement, the issuer’s terms and the borrower’s credit profile.
For households already struggling to cover everyday expenses, a high interest rate can reduce the portion of each payment that goes toward the principal balance, making it harder to eliminate the debt.
How to ask your credit card company for a lower interest rate
One of the first steps consumers can take is to contact their credit card issuer and request a lower APR.
There is no guarantee that the company will approve the request, but the Consumer Financial Protection Bureau (CFPB) explains that some creditors may be willing to reduce interest rates, waive fees or adjust payment arrangements.
Before calling, cardholders should review their current interest rate, outstanding balance and payment history. It can also help to explain why they are requesting a reduction and what monthly payment they can realistically afford.
Consumers can ask the issuer whether it offers a temporary lower rate, a hardship program or another repayment arrangement. If the company agrees, they should request the new terms in writing and confirm how long the reduced rate will last.
There are also specific protections when an issuer raises an existing credit card interest rate. According to the CFPB, companies generally must review certain rate increases at least every six months. If the rate is higher than the one the issuer would currently offer to a new customer, the company must reduce it under the applicable rules.
Balance transfers and debt consolidation: What to consider
Another possibility is moving an outstanding balance to a different credit card through a balance transfer.
Some issuers offer promotional interest rates, including 0% APR for a limited period. This can give consumers time to pay down their debt without accumulating interest at the standard rate.
However, these offers are not automatically cheaper. Cardholders should check the balance transfer fee, the length of the promotional period and the APR that will apply once the offer expires.
A debt consolidation loan is another option. It combines several outstanding balances into a single installment loan, potentially with a lower interest rate and one monthly payment.
Before accepting an offer, consumers should compare the total repayment cost, including fees, and check whether a lower monthly payment simply extends the repayment period. A longer term could mean paying more interest overall.
The CFPB also warns that using home equity to consolidate credit card debt carries a significant risk: the home becomes collateral, and borrowers could lose it if they fail to repay the loan.
What to do if you can no longer afford your credit card payments
Consumers who are struggling to make even the minimum payment should contact their credit card company as soon as possible, rather than waiting until they fall behind.
The CFPB recommends explaining the financial circumstances, how much the cardholder can afford to pay and when normal payments might resume. Issuers may offer alternative payment arrangements, reduced interest rates or waived fees.
Another option is seeking help from a nonprofit credit counseling organization. These organizations can help consumers review their budgets and evaluate ways to manage outstanding debt.
Consumers should be cautious of companies that promise to eliminate debt, demand upfront fees or tell them to stop communicating with their creditors. The CFPB identifies these practices as potential warning signs of debt relief scams.