5 New Year's resolutions that save money
If this is a priority, it means that you've already recognized your life would be better without the stress of debt.
The average American owes $8,329, according to a 2009 survey by The Nilson Report, a Carpinteria, Calif.-based newsletter on consumer payment systems. If you're carrying that load with a 15.99 percent APR and making minimum payments of $167 per month to start, it will take you 33 years to pay off the debt. And you'll pay $15,289 in interest.
But kick in an extra $35.50 per month (paying $202.50 every month), and you can pay that same debt off in five years. Total interest: $3,821.
Paying down debt has another added benefit: Your credit score goes up. That means the next time you borrow money, you'll pay less for that loan.