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Credit card debt is a common issue.
The average credit card debt among American consumers is $6,218, according to aTransUnion report.
Additionally, according to the latest Federal Reserve data, the average credit card APR is 22.63%.
But high balances and APRs arent the only concerns you should have when it comes to credit card debt.
And its vital that you separate facts from fiction.
High credit utilization can lower your score.
Additionally, carrying a balance accrues interest, leading to unnecessary financial costs.
Instead, Shirshikov said you should always pay off your credit card balance in full each month.
Closing an old account reduces the average age of your credit accounts, which can negatively impact your score.
Moreover, it reduces your overall available credit, potentially increasing your credit utilization ratio.
Shirshikov recommends keeping your old credit accounts open, especially those with no annual fee.
Instead, Shirshikov recommended spacing out your credit card applications and only applying for new cards when necessary.
Consider your credit needs carefully and plan applications strategically to minimize hard inquiries, he said.
Shirshikov recommended evaluating your spending habits and financial discipline before accepting a higher credit limit.
Itll save you money in the long run and help you clear that debt faster, he said.
Davidson said you should educate yourself on the actual impacts of different debt relief options.
Consult with afinancial advisoror credit counselor to understand how various strategies might affect your specific situation, she suggested.
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