The next recession could crush many with credit card debt investinyou (In partnership with acorns.)
While most people are doing well these days, there are significant pockets of instability. Many people are already living close to the edge, and a recession plus very high credit card rates would be a nasty one-two punch. Many more people might be unable to pay their bills.
Credit card rates have fallen slightly since the Federal Reserve cut rates in July, but that's little comfort to credit card debtors. A quarter-point decrease from the record-high of 17.8% only saves someone making minimum payments toward the average debt $1 per month. The Fed pegs that average debt at $5,700, which means those minimum payments would stretch nearly 20 years and cost about $7,500 in interest .
You could also consider a personal loan. Rates aren't zero, but they are as low as the mid-single digits if you have good credit. Personal loans are a useful way to consolidate debt and lower your interest rate. The application process is quick and easy, and the debt is unsecured, so while you should pay it back, you're not putting your house or car on the line. The typical term is three to five years.
The flip side of earning more is spending less. To that point, let's remember Benjamin Franklin's famous saying, "A penny saved is a penny earned." Consider dropping extras that you're not taking full advantage of. Premium cable channels, gym memberships and other subscriptions are good places to start, because when you cut a recurring monthly expense, that has 12 times the annual impact of doing a similar thing one time.
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