With tax season bringing on income tax returns, and stimulus checks in many American’s bank accounts, the extra cash has paying down debt on everyone’s mind.
One of the most important factors you need to look at when evaluating your debt is your interest rate. If you have multiple balances such as credit cards and loans, you’ll want to work on paying down your balances that have the highest interest rates first.
Paying down the higher interest debt could save you hundreds, or even thousands in the long run. No matter what you owe on a debt, the higher the interest rate, the more you’ll be repaying. As that debt sits, interest accrues and burns a bigger hole in your wallet than your minimum payment would normally cost you.
For example, if you have a store credit card sitting at the average 12-18% interest rate, you’ll be overpaying for interest much more than you would for a personal loan at a 6% interest rate.
By paying off those high-interest balances, you’ll be saving more money in the long run, allowing you to put that extra cash towards more of your financial goals!
At White Rose Credit Union, we are committed to helping our members unlock their financial freedom and live their lives with happiness. It’s your life. We care.
Contact us or call 888-755-9773 for insights regarding your financial wellness.
