Interest rates on credit cards have been steadily increasing, causing individuals with credit card balances to pay even more for their debts. The rebates being issued by the US Government are meant to be spent to stimulate the economy, but it’s a sure bet that many people plan to use that money to get rid of some of their existing debt.
Using the “free money” to pay off your existing high interest debt can give you a way out, as long as you avoid the most commonly made mistakes people have after paying off debt:
- Finding the available credit so tempting that you go out and charge some new purchases to replace the money you’ve just paid off!
- Feeling as if you have more money available each month due to paying off a bill or two; and overspending your salary to the point that you’re late making payments on other bills.
- Opening a new account with a higher credit limit after paying off an older account
If you do decide to use the rebate to pay off some of your debt, you will definitely save money on interest payments. Even if you are unable to pay off all of your credit card debt, applying such a significant payment all at once will help lower what is owed and cause you to pay less interest over time.
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