If you have debt, you’re just like most people – the average American has $90,460 in debt. Depending on where you live, you may be more likely to carry debt. For example, Hawaii now has the second-highest amount of credit card debt per borrower in the U.S., according to a new Moneywise report. That debt is also rising fast: the average credit card borrower owes $4,260 in Hawaii, up 14% from last year. Also, the total debt average per borrower in The Aloha State is $82,650, which means the state is moving the needle in terms of that national average.

Feeling the pain of debt payments? If you’re looking into how to lower your credit card APR and learning about various credit card APRs and interest rates, you’re onto something. The only way to get out of debt is to find ways to pay it down without getting drowned in interest payments. Here’s what you need to know.

What Are APRs and Why Do They Matter?

APRs, or Annual Percentage Rates, represent the annualized cost of borrowing money on a credit card or loan. They encompass not only the interest rate, but also any additional fees charged by the lender. If you’re trying to pay down debt, understanding APRs is crucial because they directly impact the cost of carrying debt over time. High APRs can lead to substantial interest charges, making it harder to make progress on reducing the principal balance (the initial amount you borrowed).

If you’re on a journey towards financial freedom, paying attention to APRs can help you come up with money strategies. You can prioritize paying off debts with higher APRs so you pay less debt over time. You can also lower the overall APR by consolidating debt or transferring balances to lower-interest options that can save money and expedite your debt payoff journey. Also, consistently making payments above the minimum required amount can further help reduce the impact of high APRs, leading to faster debt reduction.

Tips to Lower the Amount of Interest You Pay

To lower the amount of interest paid on credit card debt, consider the following tips:

  • Transfer balances to a low or 0% APR credit card.
  • Negotiate with your current credit card issuer for a lower interest rate.
  • Prioritize paying off high-interest cards first.
  • Avoid new purchases on high-interest cards while paying down debt.
  • Consider debt consolidation with a personal loan or a low-interest credit card.
  • Make larger or extra payments beyond the minimum amount due each month.
  • Set up automatic payments to avoid late fees and potential interest rate increases.
  • Use windfalls or extra income to make lump-sum payments and reduce the principal balance faster.
  • Explore credit counseling services for debt management assistance.
  • Create a realistic budget and stick to it to manage expenses effectively and focus on debt reduction.

Bottom Line

The situation in states like Hawaii is dire when it comes to credit card debt. If you can relate to the pressure of carrying high credit card balances, educating yourself about APRs is a smart move.

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