More consumers are expected to pay off holiday debt this year, according to a recent survey from Credit.com.
The study found that 59.4 percent of respondents aim to pay off their debt in full this year, rather than carry a balance.
That’s up from roughly 45 percent a year ago, signaling a pretty dramatic change, possibly sparked by the ongoing credit crunch.
Another 12.8 percent of consumers plan to pay down their debt, but still carry a balance, while 25.9 percent said they didn’t accrue any holiday debt.
Assuming you carry debt each month, you’ll be subject to paying interest, which can add up quick and make getting out of debt that much more difficult.
Let’s look at an example:
In the above scenario, you’d be paying roughly $50 in interest each month, which would certainly make it difficult to pay down your debt, especially if your payments aren’t much larger than $50.
But if you elected to move the balance to a 0% balance transfer credit card, every payment you made during the first 12 months would go toward the principal balance, in other words, the debt.
So you could pay off your debt much faster and avoid pesky finance charges in the process, all for simply completing a balance transfer offer.