What's New at
AmeriChoice?

In January we introduced you to the idea of tracking your income and expenses. Recording these findings should have helped you to better understand your current financial situation and spending habits. So what’s step two?

Tackle Existing Debt.

The average U.S. adult with a credit card is carrying around $5,596 in credit card debt (Source). This doesn’t include the average amount of student loan debt, which is now $28,400 (Source). These numbers obviously vary greatly per individual, but the statistics are clear. You’re more than likely walking around with some sort of debt saddled on to your back, whether its hospital bills, car payments, student loans, credit cards, or any other number of reasons.

What is one thing that all debt has is common? It comes at a price. When you borrow money, you’ll need to pay it back – with interest. Interest rates can stretch as high as 20% in the lending market! Even if you’re paying 4% interest on your loan, that interest adds up to surprisingly high amounts during the life of your loan. One of the smartest things you can do when evaluating your existing debt is to look for refinancing options at lower interest rates. Let’s look at an example of what you could save by simply reducing your interest rate.

If you carry the average credit card debt of $5,596 and you can afford $250 a month to pay down the debt, with the average credit card interest rate of 14.95%APR*, it would take you 27 months to pay off the card and you’d end up paying $1,006 just in interest.

Now let’s adjust the credit card interest rate to 8.90%APR*. You could pay off the balance in 25 months and only pay $546 in interest! That’s almost half the amount of interest and two less months of payments.

Now it’s time to look at your own debt and find out exactly what you’re paying in interest. Then research your local financial institutions to find out if you could be paying a lot less. At AmeriChoice, we’re currently holding a VISA balance transfer promotion, so if you’re thinking of tackling your existing credit card debt – we’re a great place to start.

What other advice have you received about tackling debt? Let us know in the comments below.
*Annual Percentage Rate