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Tips to pay off credit card debt

Experts recommend transferring debt from old credit cards to a new card with a zero percent interest rate.

When stimulus checks were being sent out during the pandemic, the personal savings rate in the U.S. hit a record. But there's been a total reversal since then, and credit card debt is on the rise.

A new survey from Bankrate finds 46% of credit card holders carry debt right now, which is up from 39% in January 2022.

"And that debt is more expensive, credit card rates are near their highest point ever," says Ted Rossman, Bankrate's credit card senior industry analyst.

According to Bankrate, the average credit card interest rate is 19.59%. That rate could present an uphill battle for a consumer with a $5,500 balance. 

"If you only make minimum payments, you're going to be in debt for about 17 years, and you're going to pay about $7,500 just in interest," Rossman says.

Jamie Feldman has $13,000 in credit card debt and that's actually an improvement. This past summer she had racked up nearly $20,000 dollars in debt. 

"I just sort of thought of it as this thing that was eventually going to go away, if I ignored it enough it would just disappear one day," Feldman says.

But she decided to do something about it and posted a video on social media explaining her predicament. 

"I have a lot of debt, it's partially because I was irresponsible with money and partially because I was never taught how to manage my money," Feldman said on TikTok.

The writer and journalist sat down and put together a budget and changed her spending habits, cutting back on eating out and shopping. She also transferred much of her debt from her old credit cards to a new card with a zero percent interest rate, allowing her to just pay off the principal.

It's a strategy Rossman recommends. 

"Essentially the new card pays off the old cards, and then you pay the new card back at a much lower rate," Rossman says.

The 0% interest rate on Feldman's card only lasts one year before it kicks up to a rate of around 20%. Feldman plans to have it paid off before the rate changes.

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