The $600 rebate checks as a potential game-changer for how families continue to rack up credit card debt. Freedom Debt Relief is an industry leader in debt resolution. Since 2002, they have brought over $20 billion in otherwise uncollectable debts to resolution. With the proposed rebate checks, families will at least have a new option to go after high-interest credit card balances in the most effective way.
Freedom Debt Relief provides no-cost, no-obligation consultations to anyone ready to take the first step to relieve the burden of high credit card debt. At average terms and a 22% APR, it would take almost five years to pay off a $1K credit card debt. In that time, consumers will have paid that car off three times with over $624 in interest paid. For those who are in crisis, it’s important to address high-interest debt immediately. Those unexpected cash inflows, such as through rebate checks, create the perfect opportunity to enact long-term solutions.
The new minimum payment for a $1,000 credit card balance will now total $28.33 per month. Still, if consumers were to apply that same theoretical $600 rebate to their monthly payment, they just lowered their principal balance down to $400. The new minimum payment on this new smaller balance would then fall to about $15 a month. By paying down the initial balance with the rebate, families could shorten their repayment period from four years and ten months to just three years and one month.
This method reduces both the repayment period and total interest paid. In particular, consumers who pay off $600 of a $1,000 balance reduce their credit card interest costs by an average of $470. The time and money savings they would achieve show how using a fraction of these rebate checks strategically can reduce taxpayers’ debt and future liability burden.
For four-person families, each adult and dependent child will get a minimum of $600. That means the maximum combined rebate can be as high as $2,400! Important note— the rebate amounts will phase down over time for married pairs. This phase-out starts for people making more than $150,000 per year. The financial landscape is changing, and families need to be able to make the best choice when they’re suddenly cash-rich.
Current interest rates hover around 4.00% APY. This context underscores the value of prioritizing high-interest debt repayment over other expenditures when receiving cash outside of regular earnings. Act quickly to lower your credit card debt before interest rates increase even more. In the long run, it’ll lead to more financial stability.