The Americans started 2020 together with more than $ 1 trillion According to a recent study by WalletHub, $ 76 billion in credit card debt came from 2019 alone.
That’s a lot of debt.
But despite this astronomical number, Americans are decreasing their debts at a record rate. In the first half of the year alone, we repaid more than $ 118 billion in credit card debt.
Go to us!
This is the first time in 30 years that our debt has decreased in the second quarter of the year, and this is the first time since the 2009 recession that we are likely to end the year better than we did at the beginning. Experts believe this has a lot to do with our changing consumer habits as a result of the pandemic.
But some states do better than others. Where does your state end up? And how can you get out of credit card debt even faster?
The states that pay off most of the credit card debt
The recent WalletHub study, which examined data from TransUnion and the Federal Reserve, found that Californians are driving us all high by paying off more than $ 7 billion in credit card debt this year. That is 6% of the total government debt.
And while Vermont residents paid just $ 95.5 million of their debt, the lowest number in the country, that is still more than 6% of their state’s total cost.
But if we break it down by household, we can really see which states have the greatest impact on their finances:
- Alaskans had the highest average household debt at $ 663.
- Hawaii ranked second with an average of $ 647 in credit card debt.
- Back on the mainland, the Virginians paid an average of $ 565, with Maryland not far behind at $ 552.
Other top states getting debt relief above $ 500 per household include California, Florida, Texas, Georgia, New York, New Jersey, and Connecticut.
3 simple ways can make a bigger impact on your credit card debt
Well, this isn’t a competition (but maybe we should make it one – a nationwide battle royale to reduce debt!). Any amount that you can pay for your credit card debt is important to your overall financial health. But the more you can work on it, the better.
Here are some tips to help you be more like Alaskan and get your credit card debt down the most:
1. Consolidate your credit card debt
One of the biggest barriers to paying off credit card debt is the interest that you accrue the longer you hold on to it.
When your credit cards are in balance, you might pay 20% interest each – and the longer it takes you to pay them off, the richer the credit card companies get.
Consolidating your credit card debt into a single low-interest loan can make it easier to repay it sooner and at a cheaper rate. A website called AmOne want to help.
If you owe your credit card company $ 50,000 or less, AmOne compares you to a low-interest loan that can be used to pay back every single one of your balances.
The advantage? You have to pay an invoice every month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you will be out of debt The much faster. Plus: No credit card payments this month.
AmOne will also not make you stand in line or call your bank. And if you’re worried about not qualifying, it’s free check online. It only takes two minutes and can help you pay off your debt years faster.
2. Make a budget
When you create – and stick to – a budget, you can free up money to pay off your debts. The 50/30/20 rule is an easy way to manage your money without completely overhauling your life.
It’s simple: 50% of your monthly take-away pay goes into essentials (think rent, groceries, minimum debt payments, etc.), 30% goes into your personal expenses (like Netflix and doing your hair), and the last 20% goes to your financial goals.
Making sure you take the last 20% into account can help you pay off your debt faster than paying the minimum every month.
3. Boost your credit
You might wonder how your credit score affects the bills you are already staring at, but better credit can open many helpful doors.
With a good credit rating, you can get lower interest rates and better credit card offers when refinancing (for interest-free transfer offers!).
If you don’t know where to start, find out what your credit score is. With that in hand, take a close look at your credit report and make a note of late payments or overloaded credit cards.
Once you identify the issues, you can follow the steps to resolve the issues.
Americans in particular are doing a great job reducing their credit card debt this year, and with the right tools we can take more of them off.
Kari Faber works for The Penny Hoarder.
This article originally appeared on www.thepennyhoarder.com