Beating Credit Card Inertia

November 02, 2023

Thanks to COVID relief payments, many emerged from the pandemic with balance sheets stronger than they had been in years. However, when COVID payments stopped, many consumers turned to credit cards to maintain their lifestyles. As a result, the debt burden of many Americans has multiplied dramatically in recent months.

Last week, the Consumer Financial Protection Bureau (CPFB), a government agency charged with encouraging financial companies to play nice with consumers, released its report to Congress on the consumer credit card market. A first read of the report reveals sobering statistics:

  • In 2022, consumer credit card debt topped $1 trillion—its highest ever—while credit card companies earned $130 billion in interest and fees.
  • Credit card delinquencies have risen to near pre-pandemic levels. Long-term delinquencies (payments 90 days or longer past due) are a special challenge among younger cardholders, many of whom now face a resumption of student loan repayments.
  • More cardholders are carrying month-to-month balances. The total average credit card balance per cardholder is $5,300—about what it was before the pandemic.
  • Fees for late payments surged to $14.5 billion in 2022, up from $11.3 billion in 2021—likewise close to pre-pandemic levels.
  • Nearly one-tenth of credit card holders are in “persistent debt”—a state where they are charged more in interest and fees each year than they pay.
  • Rising interest rates continue to pinch consumers. Credit card companies charge an average margin of 15.4 percent above the prime rate during 2022. Since January 2022, the prime rate has increased from 3.25 percent to 8.5 percent; the average annual percentage rate is around 24 percent.

If you are feeling some of the pain highlighted in the CFPB report, now is the time to get your credit cards under control. With a few simple actions, you can get the upper hand in your fight for financial independence.

Your biggest enemy in your battle to tame your credit card habit is your own inertia. Credit card companies thrive on your inertia. They earn enormous profits because so many people are too busy, too distracted, or (dare I say it?) too lazy to deal with the details of their personal financial lives. Why else would we pay a 29% APR on a credit card balance when we could easily transfer our balance to 0% APR card?

If you are currently paying a high interest rate on a credit card balance that carries over from month to month, do yourself a favor and find a card at a much lower interest rate. Several of these so-called balance transfer cards offer an introductory APR of 0% for up to 21 months. Transferring your balance will save you thousands of dollars in interest every year.

Finding the right balance transfer card will take effort, but you can find ratings and comparisons for these cards at websites such as or But beware: these websites receive compensation for the financial products they promote, so take their input with a grain of salt. Carefully review the terms of each card. Some card companies trumpet a 0% APR for a given number of months with no annual fee, but then hit you with a 5% transfer fee on each balance transfer you make.

The cheapest balance transfer cards generally require credit scores of 690 or better. If your credit score is below that, evaluating your options may get a little trickier. You may have to settle for a higher introductory interest rate or a higher transfer fee.

After you’ve transferred your balance to a 0% APR card, focus on paying down your balance as quickly as you can—hopefully before the introductory period expires. Once the introductory period ends, the APR will reset to a normal credit card rate. If your credit card usage is a constant problem, consider transferring your balance and shredding the card. Don’t let inertia reassert itself, complicating the problem you are working so hard to overcome.

Please see important disclosure information here.

Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions regarding investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940, or email them to