Part 3/9:
High-interest loans, particularly credit card debt, can become a heavy burden during uncertain times. Interest rates for credit cards typically range from 20% to 26% per annum, with late payments exacerbating costs through compounded daily interest charges. Such debt can accelerate rapidly, draining your cash reserves when they are most needed.
The best approach is to systematically pay off high-interest loans first, then address lower-interest debts. Reducing debt frees up cash flow and diminishes financial stress, allowing you to allocate resources more effectively during economic downturns. Avoid accumulating new debt unless absolutely necessary, especially in an uncertain economy where liquidity is paramount.