Gephardt: Paying Down Debt Expected To Be Harder In 2021
SALT LAKE CITY, Utah – Going into debt over Christmas is as American as baseball or apple pie. So is setting a new year’s resolution to pay it down.
Getting out of debt may be harder this year than it has been in years past, warned credit card expert Ted Rossman, especially if part of the plan is to open a new credit card with a low interest rate and transfer your balance.
“The problem this year is that banks are very risk-averse, and they really don’t want to take on other people’s debt right now,” he said. “It’s harder to get those offers, which means that you’re probably going to be paying more interest.”
As the KSL Investigators have reported, not only are credit card companies making it harder to open new accounts, some are canceling credit cards or severely reducing credit limits.
Rossman suggested contacting credit counseling agencies. Some of them are non-profits and will help people get out of debt or improve their credit for free.
According to a survey from WalletHub, 39% of Americans believe they overspent during the holidays.
“People should focus on saving as much money as possible in 2021,” said Jill Gonzalez, WalletHub analyst. “The best ways to maximize savings are to make a budget that reduces spending and to automate monthly transfers into a savings account that you don’t touch except in emergencies.”
Gonzalez said now is a good time to apply for a new credit card because most spending habits and financial priorities have changed a great deal since the beginning of the coronavirus pandemic.
“When your biggest spending categories or your bill-payment habits shift, the credit cards best suited to saving you money will likely change as well,” she said
She said WalletHub has seen some merchant banks offer some deals, including rewards bonuses and, yes, 0% introductory annual percentage rates.