FLORIDA — The average shopper spent an estimated 875 dollars on gift-giving this year. Add it to America's crushing credit card balance that hit more than a trillion dollars before the holidays, according to the Federal Reserve Bank of New York.
To make matters worse, card interest rates rose 30 percent over the last year and a half. Higher balances and interest rates equal a losing battle for consumers. Making the minimum payments could leave consumers in debt for decades.
Debt Attorney Leslie Tayne said the first step in taking control of your finances is to list all expenses and income. “I take a pen and a piece of paper, and I write it out, and then I add it to apps and other programs that I use to keep track of spending. But I think when you write it down, it stays in your head.”
Once you label your debt load, there are multiple options for paying it down. One of the most popular is the snowball method. Pay the smallest balance off first, then add that extra money to the next smallest. Experts say the momentum will keep you motivated.
Tayne advises her clients to go on a spending diet and tackle balances with the highest interest rates first. “Remember, the more you add to high-interest balances, the more you are going to pay out.”
