GET FINANCIALLY FIT IN THE NEW YEAR
If you've resolved to improve your finances in 2020, reducing your credit card debt should be a top priority. In 2019, the typical household in Georgia carried an average balance of $6,569 in revolving credit card debt.1 With the addition of interest rate charges and fees, rising balances can make it difficult to pay little more than the minimum due, costing you more and extending payment terms.
Debt can be overwhelming but with focused planning, you can be on the path to financial freedom. The first step in taking control of your finances is to understand your income vs. expenses. Creating a customized budget using a budgeting calculator can help you define where you want your money to go and decide how much extra you can set aside for debt payments.
The next step is to start tackling your credit card debt. There are many strategies to paying off debt quickly but the “right one” is the one that you will stick with until the debt is paid. A few methods to consider include:
Avalanche Method – Paying off credit card balances in the order of highest interest rate to the lowest, while making minimum payments on other credit cards.
Snowball Method – Paying off the smallest credit card balance first, regardless of rate, while making minimum payments on other credit cards.
Balance Transfer – Transfer your credit card balances to a different card with a lower interest rate. A lower interest rate will reduce added interest charges which may help you pay off the balance quicker.
No matter what plan you follow, the sooner you deal with your debt, the faster it will be paid off, giving you the freedom to do more with your money.