Many of you used your credit card to purchase gifts this holiday season, but may now find yourselves in debt. According to the Federal Reserve, Americans have more than a trillion dollars in credit card debt.
Credit card debt is a problem for many Americans, but experts say there are several ways you can get a handle on it before next Christmas.
“To have the financial peace and freedom you want, is to work down that debt,” said Briana Cousins, Financial Education Coordinator for Redstone Federal Credit Union.
In order to do that — financial experts say pay more than your minimum balance.
“So, if you have several credit cards, you may want to put them in order, either by the lowest amount. I would typically tell someone to do it by the highest interest rate, because that’s what’s costing you the most. Make sure you’re paying more than the minimum at least on the first one,” Cousins said.
Another method is to transfer your balance.
“Interest rate is going to be what cost you the most, so looking for how can I transfer that balance on to something with a lower interest rate. Maybe another card or consolidation loan or something like that, and paying less over all on the whole balance,” she explained.
Experts also suggest being proactive and start saving for next year.
“You can open up a savings account, I know a lot of people, they would just take their excess change and just put it away and at the end of the year, they would run it through the machine and get hundreds of dollars, and that’s the only thing that they would use for their gifts. So, there’s multiple ways to do that, you can go online and look at other savings methods. But the best one, is come up with a plan, have a goal, stick to it and you’ll meet that goal,” Cousins added.
Financial experts say no matter how you do it — don’t wait. Getting out of debt has to be your priority.