Sumary of Here’s how to decide what debt you should tackle first:
- In 2020, consumer debt ballooned to a new high of $14.88 trillion, a 6% increase from the previous year, according to credit rating company Experian..
- Included in that total is many different kinds of debt, including credit cards, student loans, mortgages and more..
- Interest rates on a credit card, for example, can be as high as 30% and may even compound daily, meaning they can quickly grow even more if they aren’t paid off..
- Debt in the yellow zone has lower interest rates, is generally longer-term and might have some tax advantages, such as a home equity line of credit, federal student loans, both of which have some deductibility….