BUFFALO, NY (WKBW) – U.S. household debt was at a huge $14.6 trillionaccording to the Federal Reserve.
The average American carries $5,500 in credit card debt.
Add inflation to the mix, and many people can find themselves in a Deeper debt hole.
The annual percentage inflation hit 7.9% in February, a 40-year high. Experts said the war in Ukraine could make the situation worse.
“So basically what’s happening is the Fed is trying to slow the economy down a bit, so they’re trying to make everything a bit more expensive by raising rates. That’s going to make people buy less and borrow less because it will be more expensive and give the supply chain a bit more time to catch up and hopefully bring inflation down,” said Sarah Blankenship, chief operating officer of Wilcox Financial. Group.
So what’s your credit rating?
Six hundred and ninety-eight is the average credit score in the United States.according to data collected by VantageScore, as of February 2021. Empire State fared slightly better with a average score of 712.
Blankenship encouraged people to check their budgets and look for ways to pay off loans a little faster, or perhaps explore a personal loan option.
“But really, you have to go to the source and see where you might overspend, and see how we can save and plan a little more appropriately,” Blankenship said.
According to her, seven strategies will ensure a higher credit rating:
1. Review your investment portfolio.
2. If you have too much cash, put it in a high-yield savings account.
3. Try to optimize your credit score by paying all on time.
4. Try paying your credit card by full.
5. Avoid taking out new credit cards if you don’t need them.
6. Keep old accounts open and manage outstanding ones.
7. Hire a professional to help you with your financial strategy.
“All of that can help boost your credit score, so when you apply for something, the rates are a bit higher. You still get the best rate you could qualify for,” Blankenship said.
Another tip: use a credit card refund calculator.
This can help you figure out how long it will take to pay off a balance and how much it will cost you, including any interest that may accrue.
Websites like WalletHub also recommend good credit cards that could save you money and get you out of debt faster.