Floridians have taken credit card debt to task in the last year.
Five cities in the Sunshine State posted the 10 largest reductions in credit card debt in the fourth quarter of last year from the same period the previous year, according to a report released Tuesday from credit scoring bureau Equifax.
Residents of Port St. Lucie slashed their debt by almost 24 percent year-over-year, while Ocala residents cut theirs by 21 percent. Sarasota, Tampa and Lakeland all reduced their credit card balances by at least 18 percent.
Other big winners? California had three cities in the top 10, while Washington and Louisiana each had one. Overall, Americans owe more than $800 billion in credit card debt, according to Equifax.
In a separate survey, Bankrate's Financial Security Index revealed Tuesday that more than half (54 percent) of U.S. consumers have more in their emergency funds than on their credit cards. Still, a quarter of Americans reported they owe more on credit cards than they have saved for emergencies.
If you belong to that 25 percent, maybe it's time for a credit card debt plan.
Consider shifting your debt to another card in a balance transfer if you have a great credit score. These cards typically feature a low to zero percent interest rate for at least six months (by federal law). That gives you time to pay down debt without accumulating interest. But you have to stay motivated because the APR jacks up eventually and could be higher than your original card.
Otherwise, tackle the balance with the highest interest rate first. Get it out of the way before moving onto the balance with next highest rate.
But if you need constant motivation, try extinguishing the smallest balance first and then going after the next smallest. While you'll feel a sense of accomplishment, remember that you're piling on more interest with this method than getting after the balances with the highest interest rates first.
No matter how, the key is commitment. Good luck!
How did you rein in credit card debt?
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