RICHMOND, Va. (WWBT) - About 14% of Americans, say their financial situation improved over the pandemic, but 3 times as many people - about 42-percent - say their financial situation got worse.
That’s according to NerdWallet’s annual Household Debt Study. For a vast majority of Americans who are worse off in the pandemic - it’s often a job loss or a decrease in income that’s caused all the problems. Sara Rathner a personal finance expert says when you are in a dire financial situation, especially if you’ve already taped into your emergency fund, credit cards are often the go-to. They may keep you afloat.
“Credit card debt is down around 6% but’s till just over $7,000 which is pretty similar to last year. Which ends up costing you about $1,100 in interest every year. But other forms of debt have gone up. Like mortgages auto loans and the like,” said Rathner.
Sara says if you are paying 20% APR and the interest rates went down and now you’re paying 19.79% APR. It is lower mathematically, but it’s still very expensive.
Prioritize your credit card debt. Pick one to target and work to pay it off. Rathner says call each of your credit card companies and ask for a lower APR. Sometimes they will work with you. And it doesn’t hurt to ask. Rathner says to consider a balance transfer - to get a lower or promotional APR and you could consolidate your debt with a personal loan.
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