US News and World Report had a little piece where they discussed some good New Year’s resolutions related to retirement and I thought that I’d put each of them through their paces. The fourth retirement resolution was to get rid of credit card debt.
“Pay off your credit card debt because your investments will not be rewarding you at the same rate as your credit card debt,” says Ted Allrich, the author of Comfort Zone Investing. Credit cards carry interest rates that can top 20 percent, as well as late fees and penalties. That is much higher than the return you can expect on most investments.
Credit card debt is the black hole in the financial industry (for consumers anyway!), once you open one up, it seems like it sucks up all of your money. When you’re battling 20% interest rates, it’s difficult to establish any semblance of a strong financial foundation, so you must get rid of the credit card debt you’re holding onto right now. If your credit is strong enough, consider taking out a 0% balance transfer to give yourself a breath of fresh air as you continue the fight. If you are looking for a card, consider one from this list of no fee 0% balance transfer credit cards.
Source: US News and World Report