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Millions of Americans are preparing to file their yearly taxes. Some will be forced to pay more to the government, while others will receive a tax refund check. Those receiving refunds now have the additional stress of figuring out how to spend their refund. I'm expecting a refund, and plan to use it to save myself $2,300 dollars in credit card interest.
Paying off Credit card debt
There are a lot of things one could do with their tax refund. Some use it to purchase things they want or need, others will put it in the bank and save it for a rainy day. Both of which are fine options. For me it just makes sense to use the extra money to pay off my credit card debt. In today's uncertain economy it's important to eliminate as much excess debt as possible in case of a temporary layoff or job loss.
The Overall Savings
The current interest rate on my credit card is 22.90%. It rose from 19% in 2008 when the American economy fell into a recession. If I continue to make my current minimum monthly payments of $35, it will take me nearly seven years and an additional $2300 to pay off my balance. It may not seem like a lot of saving over such a long period of time, but in today's economy, like most people, I need to save ever dollar I can.
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