The title says it all. Feel free to move on.
Still here? I guess I am too. Let’s talk a little further.
We all pine for the investment that beats stock market returns — roughly 9% each year. Well, paying off your credit card debt is one of the best uses of your money, earning you a return twice as great as average stock returns. If you don’t, the interest rate (APR) of your credit card is around 20%. If you dig yourself into a credit hole, it’s difficult to get out. Imagine making a $1000 purchase on a new appliance. If you just pay the minimum payment of $20, it will take you over 9 years to pay for the item. In those 9 years, you not only bought the appliance for $1000, but you also spent roughly $1200 on interest, more than the cost of the appliance itself. That’s a terrible deal.
You can find a credit card debt calculator here.
So, please, always pay your credit card debt in full each month.
If you are in a credit hole, though, do everything you can to pay off that debt. Harvard researchers have found that, on average, paying off the smallest debts first helps you to pay off all of your debts more quickly.
If you keep on falling in and out of credit card debt, get some scissors and cut up those cards. You may be better suited for a debit card, which takes money directly out of your checking account.