Our mission is to connect people nationwide to debt relief specialists serving their area.

It's fast and convenient
It's your right to get relief
Your savings may surprise you
It's free, no commitment

Your Free Debt Relief Savings Estimate only
takes a few minutes and will not affect your credit.

Tax Refunds Should Pay Down Debt

Posted by Bill Crowley on April 11 2011 @ 10:05 am

Share this on:

Use your tax return money to pay off credit card debt. If you have credit card debt, the tax return that already came, or is about to reach your mailbox should help you pay off some of those liabilities.

An extra $100 a month withheld from your paycheck could go a long way in knocking out credit card debt, according to The Detroit News. A total of $1,200 for a year can make a big difference, especially if you have a large minimum payment.

If a payment is over $100, and a credit card balance nears $5,000, using a $1,200 tax refund to pay down debt would put you on track to get out of debt in five years, instead of eight, according to the news source. With this practice, a total of more than $2,000 in interest would be saved.

Paying off the debt will have more of a positive effect on your finances than just storing it away in a savings account, the news source added. The Internal Revenue Service has a withholding calculator to see how much you will actually get back this tax season.