Meaningful Ways To Pay Off Debt

January 4, 2018

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It's easy to go overboard when shopping for the holidays and now it's time to pay for all that splurging.  Here are some tips to pay down and off those shopping sprees faster. Look to transfer your credit card balance to a zero interest card.  While most banks charge a transfer fee to move a balance, you may be able to save money if that transfer fee is less than the amount of interest you'd pay over the zero percent interest window.  Also look at how long the 0 percent offer lasts and what rate you’ll pay after, keeping in mind that when an offer says “rates as low as …” you might qualify for the best deal only if you have excellent credit. Strategize your payoff approach. Economists say the rational thing to do is pay off credit card debt with the highest interest rate first. But many people feel better by paying off the smallest balance first as a feeling of accomplishment.  But if you have the willpower, pay off the highest-rate debts in full first is a good idea because it saves the most money. Make multiple payments a month.  Most credit cards accept more than one payment per month.  Because interest is calculated from the account’s average daily balance, you’ll wind up paying less over time if you send in money when you have it rather than waiting until you receive a bill.

SOURCE: Consumer Reports

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