The coronavirus pandemic unequivocally placed Americans under economic and social strains. However, the most important stress on a young person was within their finances.
In fact, according to a new survey, more than half of Americans said that their credit card debts increased compared to before the global pandemic began. Further, 52% of respondents said that they increased their credit limits to support their increase in spending.
But with an increase in debt, cardholders' spending habits are not slowing down and overall sales are increasing in many industries. In June, the Consumer Price Index from the U.S. Bureau of Labor Statistics surged 0.9%.
If you took on debt during the pandemic, consider taking out personal loans while interest rates are low to pay down high-interest debt. Visit Credible to see multiple lenders at once and compare personal loan options like a debt consolidation loan to pay down credit cards balances
How can a person pay off his debt quickly and effectively?
In many credit cards introductory percentage rates are low, but when they start collecting interest, they can cause a major strain on the finances. The average minimum interest rate is 15.566% and can be as high as 22.87% according to U.S. News.
What can I do to get out of this high-interest debt?
Calculate interest rates on a personal loan: Interest rates on personal loans are decreasing, down to 10.97% for the week of July 12 for borrowers with a good credit score of 720 or higher Some personal loans can see much lower rates, too. As a possible option for debt consolidation, taking out personal loans can be a viable option, however, be sure to conduct thorough research before making any decision regarding the right one.
If you have credit card debt and want to pay it off, consider a personal loan to get on a repayment plan and lower your payments towards credit card companies' highest interest rates. Is Credible to get started with credit relief options and get pre-approved with a creditor in minutes without receiving a hit to your credit reports?
Balance transfer credit card: While using a credit card can be a simple and quick way to make a purchase, they come with strict terms and can sometimes cause significant financial stress.
The survey showed that 64% of respondents felt worried about monthly interest rates, 47% felt stressed about annual fees and 25% felt stressed about their ability to make annual payments. The balance transfer credit card can alleviate some of this stress, as it usually gives an introductory period of 6 to 18 months with 0% interest, allowing cardholders to pay down debt quickly without accruing interest.
Whenever you're considering opening a new credit card, make sure to visit a site like Credible so you can view and compare all of the rates, fees, and perks being offered by card type.
Cash-out mortgage refinance: Amid Americans' increased spending, 30% of survey respondents said they're buying things that need, rather than things they just want. And 65% said they're making purchases using a credit card that they don't currently have the funds for.
Surging home prices have given homeowners the opportunity to borrow against the equity they have built in their home, taking out home equity lines of credit to pay back high-interest debt and consolidate monthly payments. Cash-out mortgage refinancing offers a variety of benefits, including potential higher rates and lower tax deductions, but it's important to be aware of closing costs and the possible added cost of private mortgage insurance.
If you are struggling to make your payments, consider taking out a low interest rate cash-out refinance to help reduce your credit card high balances and lower your monthly payment by consolidating high debt. Email The Credible Money Expert (at moneyexpert.com) and your question might be answered in our Money Expert section.