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7 tips to get out of credit card debt, amid high inflation percentage

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Posted at 7:17 PM, Mar 17, 2022
and last updated 2022-03-18 15:26:24-04

BUFFALO, N.Y. (WKBW) — The American household debt was at a whopping $14.6 trillion dollars, according to the Federal Reserve.

The average American carries $5,500, in credit card debt.

Add inflation to the mix, and many people may find themselves in a deeper debt hole.

The annual inflation percentage reached 7.9%, in February, which was a 40-year high. Experts said the war in Ukraine could make this worse.

"So basically, what is happening, is the fed is trying to slow down the economy a little bit, so they're trying to make everything a little more expensive by raising rates. This will cause people to buy less and borrow less because it will be more expensive, and give the supply chain a little bit more time to catch up and hopefully force inflation down," Wilcox Financial Group COO, Sarah Blankenship said.

Buffalo financial planner, Sarah Blankenship is the COO for Wilcox Financial Group, in Amherst. She said those carrying balances on their credit cards can expect their rates to increase.

So what is your credit score?

Six-hundred-ninety-eight is the average credit score in the United States, according to data collected by VantageScore, in February 2021. The Empire State fared a little better with an average score of 712.

Blankenship encouraged people to check their budget and look for ways to pay off loans a bit faster, or perhaps explore a personal loan option.

"But really, you have to get to the source and take a look at where you may be overspending, and look at how we can save and plan a little more appropriately," Blankenship said.

Seven strategies she said will ensure a higher credit score are:

1. Review your investment portfolio.
2. If you have too much cash, put it into a high yield savings account.
3. Try to make your credit score as best as possible by paying everything on time.
4. Try paying your credit card off in full.
5. Avoid taking out any new credit cards, if you don't need to.
6. Keep old accounts open and deal with delinquencies.
7. Hire a pro to help you with your financial strategy.

"These can all help raise your credit score so that when you do go apply for something, the rates are a little bit higher. You still get the best rate that you would be able to qualify for," Blankenship said.

Another tip: use a credit card payoff calculator.

It can help you map out how long it will take to pay off a balance, and how much it will cost you, including the interest that may accumulate.

Websites like WalletHub also recommend good credit cards that could save money and get you out of debt faster.