By paying this interest to a bank instead of keeping it yourself, you can’t or may not be willing to:
Build up savings for a new business
opportunityTake a risk on a new job opportunity
because you need the paycheckMove to a more desirable and even
lower cost location because there are no savings and no room in the paycheckDonate to causes important to youHelp family members or friends that
need financial supportSave for college for your kidsGet a new job because your credit
score is too low (this is common!)Get a lower interest on future
purchases due to the high amounts of current balances
Carrying debt and paying interest can take a heavy emotional toll.
over $8,300.37%
of households don’t pay off their credit card each monthAmericans
owe more than $1 Trillion in credit card debt
If you are carrying credit card debt or any other debt, you certainly are not alone!
List all your debts, balances, monthly
payments, and interest rates (ignore home mortgage for now)Rank them from lowest balance to highest
balance, ignoring interest ratesPay off the loan or credit card with
the lowest balance firstOnce the lowest balance is paid off,
take the money you were using on that balance and add it to the next lowest
balance on the list.
The way it works is like this:
List all your debts, the balances,
the interest rates, and the monthly payment (ignore home mortgage for now)Rank the debts in order of interest
rates, from highest to lowestPay off the loan or credit card with
the highest interest rate firstOnce the debt with the highest
interest rate is paid off, take the extra money and apply it to the next
highest interest rate.