If you have the means to pay off credit card debt, it is best to do this as early as possible, said Warren Buffett during the annual meeting of shareholders of Berkshire Hathaway.
One of his friends asked how best to deal with the money that she managed to earn. First, Buffett found out if she had credit card debt. She had a debt and an interest rate of 18% per annum.
“If I borrowed money at 18%, the first thing I would do with any amount that I got was to pay off this debt,” Buffett explained, “This is much better than any investment idea I have.” .
According to the billionaire, having paid the balance, she will save more on interest than she can get by investing money in the stock market, in real estate or in any other way. “I don’t know how to earn 18%,” he added.
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The average interest rate on credit cards in the United States is about 16% as of May 2020. “You can’t go through life borrowing money at such rates,” the investor added.
In difficult times, when millions of people lose their income and apply for unemployment benefits, it will be difficult to pay off debts, but this, according to Buffett, should be a priority.
As soon as you get rid of debts, make a habit of making payments in full so that you never have to pay interest again, the investor added.
Formerly Warren Buffett toldthat prepared Berkshire Hathaway for his death. “Berkshire Hathaway shareholders have nothing to fear. Your company is 100% prepared for our departure, ”he said.
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