Sometimes credit card debt is unavoidable. The big thing is to pay it off as fast as possible so that you don’t pay more than you need to in interest. But how? Here’s Sallie’s advice.
If I have credit card debt, where does that come out of the 50/30/20 rule?
For those of you who aren’t familiar, the 50/30/20 rule addresses your take-home pay and how it should be broken up. So 50% typically is for needs. 30% goes to fun. And the 20% is for Future You.
Where does the credit card debt come out of? Everywhere. Credit card debt is super expensive, it eats away at your wealth, it eats away at your ability to have a great future. And so I would take it across the whole darn thing, and work as hard as you can to get it paid down.
Transfer it, if you can, to a 0% interest rate card so you can get the payment levels down. Then be very disciplined about taking that and paying it down as quickly as you can. Because until you are, if you’re investing and you’ve got a credit card debt, it can mean rather than moving forward, you’re moving backwards.