Key Takeaways Using a $3,000 tax refund to pay down credit card debt at a typical 25% APR could prevent about $750 in interest over a year. Paying off debt with a 25% interest rate is like earning a guaranteed 25% return—far higher than today’s savings account rates. If you lack emergency savings, have a very low APR, or qualify for a 0% balance transfer, other uses for your refund may make more sense. It’s one of the few things many people look forward to at tax time: the possibility of a refun ...

The burden of credit card debt is high for many Americans. In the first quarter of 2023, credit card balances nationwide surpassed $1 trillion for the first time and have remained above that amount since — the most recent Federal Reserve data puts outstanding balances at a total amount of $1.18 trillion. On an individual scale, balances are high too. TransUnion data shows the average credit card debt per borrower is $6,580, while Experian data puts average balances at $6,730. With today’s very high credi ...