(WMC) - Based on a recent Federal Reserve report, financial website WalletHub has released its Q1 Credit Card Study which concludes that U.S. consumers repaid $31.5 billion in credit card debt during the first quarter of 2017.
This first-quarter pay-down is a 14 percent improvement relative to the same quarter last year. But it is 5 percent below the post-Great Recession average Q1 pay-down. Based on these early returns, WalletHub projects that we will end 2017 with more than $60 billion in new credit card debt. That would mean we'd owe well over $1 trillion in credit card debt overall.
With that in mind, here are some tips that consumers should follow to reach debt freedom as quickly and inexpensively as possible:
- Make a Budget & Stick to It – Rank-order your expenses and trim the fat until the amount you earn exceeds the amount you spend.
- Build an Emergency Fund – Your goal should be to gradually save about a year’s worth of after-tax income through monthly contributions to an emergency account.
- Improve Your Credit – A higher credit score will help you save on everything from loans and lines of credit to insurance policies.
- Transfer a Balance – You can save a boatload on finance charges by transferring your debt to a zero-percent balance transfer credit card.
- Pay Off Your Most Expensive Debt First – Devote the majority of your monthly debt payment to the balance with the highest interest rate, while making minimum payments on any other balances you may owe. Then repeat.
You can see the full report, and a complete explanation of these tips, here.