4 reasons why you should use your tax refund to pay down your credit card debt - Business Insider

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If you have credit card debt, here are 4 reasons to put your tax refund toward paying it off

In 2019, the, averaging $2,725 per recipient. That kind of windfall is something many people might be tempted to splurge, but if you have balances on your credit cards, experts across the board agree that you should use it to pay down your debt., the average credit card balance per American in 2019 was $6,194 — and for those who have lost work due to the pandemic, debt could be even higher in 2020.

Because of the high interest rates associated with credit card debt, it's the most urgent to pay off. If you're anticipating a tax refund, here are just some of the reasons you should put your refund money toward paying off your credit card debt.Credit cards are easy for consumers to use, but that convenience can come at great cost if you don't pay off your balance every single month. Unless you're charging to a credit card with aHouseholds in the U.S.

"Credit card debt is probably the worst kind of debt you can incur because the interest rates — basically, the cost of that debt can go into the double digits, which is usually much higher than any other type of debt like student loans or mortgage rates," says Brett Long, a CPA and Operations Manager at Alltime Power.

"Almost nothing you would buy with a credit card would grow in value at double-digit rates, so you're going farther in the hole the longer this debt goes unpaid.

 

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