MyTwoCents: Read CharlotteCowles's guide to getting out from under your credit card debt, just in time for the credit card's favorite season
Photo-Illustration: by The Cut; Photo: Getty Images
Come January, you’ll want some space. I respect that — it’s healthy. But let me warn you that it’s never easy to extricate yourself from our relationship, especially this year, with interest rates through the roof and inflation being what it is. The good news is that you’re not alone — credit-card balancesthan they have in the past 20 years. So don’t be embarrassed to be seen with me or anything; you’re in good company.
Last but not least, check your APR, also known as the interest rate on your credit-card balance. It’s probably higher than you think. Credit-card companies usually aren’t allowed to raise your APR on existing purchases, but there are somethe Fed raises interest rates An even better option for those with strong credit is to apply for a balance-transfer card, which is a type of credit card that charges no interest for a fixed period of time. It enables you to roll over part or all of your existing debt and then pay it down more quickly because it isn’t accruing interest. But you need to be strategic because once the zero-APR period is up , the rate can rise very quickly, adds Harzog.
There are three popular methods for dealing with debt in multiple accounts or cards. The one that saves the most money is known as the “avalanche” method, which involves tackling your highest-interest debt first and working your way down. Objectively, this is the wisest from a math perspective. But a more popular alternative is the “snowball” method, which involves starting with the lowest balance first and working your way up.
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