Nearly 1 in 10 Women Has More Than $7.5K in Credit Card Debt: How To Realistically Pay It Off

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The national average credit card interest rate is now over 24% — and the genders don’t shoulder that burden equally. According to a new GOBankingRates survey of more than 1,000 women, nearly one in 10 struggles with balances over $7,500. When excluding the 43% of respondents with no credit card debt, that number jumps to more than 16%.

So why is toxic borrowing such a routine part of the female experience?

“The challenges that women face when it comes to debt are complex and multifaceted,” said Michael Collins, CFA of Endicott College in Beverly, Massachusetts. “There are several reasons why women may struggle with credit card debt more than men.”

The following is an examination of those challenges and expert advice on how women can overcome them.

Women Face No Shortage of Unique Obstacles

For many American women, credit card debt lies at the convergence of historic inequity, biological realities and stubborn social norms.

Women Owe More Because They Still Earn Less

On March 14, Equal Pay Day, PayScale released its 2023 Gender Pay Gap Report. Its findings showed that despite the adoption of helpful income transparency laws, women still earn just $0.83 for every $1 that men make.

The result: When accounting solely for gender, women stand to lose an inflation-adjusted $900,000 in lifetime earnings compared to men.

“The first place to start is fundamentally one about income equality,” said Sam Garrison, co-founder of the financial wellness app Stackin. “The gender pay gap in the U.S. hasn’t changed much in the past 20 years, but is closer for young earners. So barring nothing else, women statistically make less money than men despite working the same jobs.”

What’s the Cost of Child Care? For Many Women, It’s Their Careers

In 2022, the average cost of child care topped $10,000 a year for the first time, according to CNBC, and research from Zippia shows that women are 40% more likely than men to see their careers suffer because they simply can’t afford it.

One in five unemployed mothers say they would enter the workforce if they had better access to quality child care — but the fact that they don’t has led to a 13% decrease in the employment of mothers over the last two decades. America’s lack of federal child care and paid family leave is responsible for at least one-third of the decline in female employment.

“Childcare is a major challenge women face, which sinks them into debt,” said Bill Ryze, chartered financial consultant and board advisor at financial services site Fiona. “In most cases, women are primary caregivers. So, when they have a baby, they are highly likely to quit their work, take time off, or take shorter or lesser shifts to get enough time to take care of their children. These measures result in reduced income and increased financial strain, which might push them to take on debt to meet their household needs.”

Cultural Norms and Societal Pressures Can Also Lead to Debt

No matter the household dynamic, women are more likely than men to adjust their careers to the realities of family life.

“Women may face unique financial challenges such as raising children as a single parent or taking time off from work to care for family members, which can cause a strain on their finances,” said Collins.

But the roots of financial strain go beyond familial obligations.

“Women also face more societal expectations — whether that be around beauty, health or how they show up for friends — than men,” said Garrison. “We frequently have heard from users about feeling forced to go into debt, instead of losing or harming friendships by not participating in trips or shared experiences.”

Then, of course, there’s plain old sexism.

“There is a tendency in some circles to consider finance a more male topic, which exacerbates the problem and so women get ignored further,” said David Martinez de Lecea, CEO of wealth and investment tracking app Exirio. “That said, the recipe to pay off consumer debt is gender-neutral.”

Despite Ugly Revolving Balances, There Is a Way Out

Even with $7,500 or more in debt, women have the power to regain control of their financial lives. Here’s how.

First, Consolidate if You Can

Debt always feels more overwhelming with multiple lenders barking for their monthly cut, so the first step should be to unify your balances under one roof.

“If they are dealing with multiple credit card debts, then consolidating the debt can help manage the repayments and reduce the interest,” said Ryze.

Two common strategies can help women combine several high-interest balances into one low-interest monthly payment:

• Personal loans: Banks, online lenders and credit unions offer personal loans with rates currently starting around 5.4%, according to Forbes. Unlike revolving debt, personal loan rates are fixed, which gives you one predictable monthly bill.
• Balance transfer: Credit cards like Citi Simplicity and Wells Fargo Reflect let you transfer your scattered balances to one card with a 0% introductory APR for 21 months with no annual fee. That gives you nearly two years to chip away at your balance without incurring any new finance charges.

If You Can’t Consolidate, Attack Your Debts in a Deliberate Order

Depending on their credit scores, not all women will be eligible for balance transfer cards or good personal loan rates. In those cases, they should pick a strategy that prioritizes certain debts instead of haphazardly throwing cash at their different balances each month.

“It is important to prioritize paying off high-interest debt first,” said Collins.

If you adhere to that philosophy, use the debt avalanche method. This strategy concentrates on the card with the highest interest rate without regard to balances while paying only the minimum on the rest, then moving on to the one with the second-highest interest rate, and so on.

Conversely, there’s the snowball method, which focuses on paying the smallest debt amount first without regard to interest rate, then the second-smallest, etc., to close out debts one by one as quickly as possible.

Avoid Doing Any More Damage, Negotiate With Lenders and Ask for Help

Finally, it’s time to get organized, get a spending plan and avoid digging your hole any deeper.

“The next thing to do is make an aggressive budget and stick to it,” said Martinez de Lecea. “All the while, pay off as much debt as you can as soon as you get your salary and start your regular and discretionary spending afterward.”

Also, remember that you’re not alone — even your lender might be able to help.

“Negotiate with creditors for lower interest rates or payment plans,” said Collins. “Women can also consider seeking out financial counseling or debt management programs to help them create a realistic plan for paying off their debts.”

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