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Do yourself a favor and pay off those credit cards

Bankrate.com reports 3 in 5 card holders are carrying debt

When it comes to debt, there are all kinds that you could be dealing with. Mortgages, car loans, student loans, even debts for new purchases like televisions, or a new couch. Each one comes with some kind of interest rate and knowing what you owe, and how much interest you are paying is an important part of getting your finances in order. 

Right now, your credit card debt is the biggest money pit. Your student loans, or your mortgage may be more money each month, but the interest rates are what makes things difficult. Credit card rates are currently at record highs. According to Ted Rossman, and analyst for bankrate.com, the average rate is 17.76%. Your home loan, car loan, or personal loan probably aren't that high, and are in fact likely a third or fourth of that rate. If you keep a balance of $1000 on a credit card with a 17.76% interest rate, you really owe $1177.60 because of interest. If you owe $1000 on your home loan, you might owe something closer to $1040 with interest. 

Paying down your credit card debt as quickly as possible is the best way to save yourself money. Pay off your credit card debt before putting extra money toward other loans or expenses. Rossman recommends using balance transfer cards, and/or opening up a new account with a 0% interest rate. Those rates can last as long as 21 months and help provide you with a little more wiggle room to pay down what you owe without the interest adding to the top. 

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