Paying Down Debt Topping Most Americans’ Financial Resolutions for 2025
According to a recent survey by Bankrate, paying down debt is the most popular financial goal for 2025, with 21% of Americans citing it as their main financial objective. This comes as no surprise, given the challenging financial landscape of 2022, with prices still elevated despite inflation’s recent subsidence. The average credit card debt per borrower has risen to $6,380 in the third quarter, reaching a record $1.17 trillion.
Lower interest rates may help reduce the costs of holding debt, but it is crucial for individuals to prioritize debt repayment to avoid accumulating more debt. The Federal Reserve has cut rates by one percentage point, bringing the average rate for the best-qualified credit card borrowers to 20.35%, down from 20.79% in August.
Experts emphasize the importance of paying down debt and urge individuals to take charge of their finances. A recent survey by Allianz Life Insurance Company of North America found that 30% of Americans spend too much money on unnecessary items, while 28% do not save any money. Debtors should consider negotiating with their credit card company for a more competitive interest rate, with 76% of people who asked for it in the past year successfully securing a better deal.
Individuals may also opt for 0% transfer offers, which can provide a no-interest promotion for a fixed period, or consider a personal loan to consolidate their debts at a lower rate. While paying down debt is crucial, experts recommend prioritizing personal savings, with a minimum of three to six months’ living expenses set aside for emergencies. Having a cash cushion can help stop the debt cycle and provide a safety net in the event of unexpected expenses.