Four simple strategies to pay off credit card debt
Americans hold almost $1 trillion in credit card debt
(InvestigateTV) — Household debt reached $17 trillion this year, according to the Federal Reserve Bank of New York, with many Americans turning to credits cards to help pay their bills.
Mary Liz Burns, Senior Director of Communications for AARP, said credit card debt is at an all-time high, with some studies showing $1 trillion in credit card debt alone.
Burns said people in all income classes are turning to credit cards to help pay for bills and other everyday expenses to keep them afloat.
“One in five people have over five thousand dollars and if you think about that and the average wages today, it’s so much debt,” Burns said.
To combat this, the AARP Bulletin recently published its Debt-Defying Credit Card Strategies, which details four strategies to help consumers with credit card bills:
Pay highest interest rate cards first: Prioritize your highest interest rate card first while paying the minimum on other cards. Once the highest interest rate card is paid off, start working on the next highest rate card.
Snowball method: Pay off your smallest debt first, then move on to the next smallest. The feeling of accomplishment of paying off a card can incentivize you to continue.
Pay off the card that causes you the most pain: Whether it is a card that is maxed out or has the highest rate, tackle the debt that causes you the most stress first.
Leverage low interest rates: Transfer balances to a new card with a low introductory rate to save on fees as you pay down the debt.
Burns said each strategy is different, so pick which one works best for your wallet. Her bottom line: get the credit card debt down and always pay more than the minimum.
“Anything you do is going to make a difference, it’s about prioritizing your debts and knowing you want that money to go work for you. Not so much for the credit card companies,” she said. “So, make the best choices you can with the money that you have available.”
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