Final answer:
Allison's credit card debt, with a 26.99% interest rate, is significantly higher than average credit card interest rates, which range between 12% to 18%. Considering that credit card debt can be more expensive than other types of loans, it's wise to prioritize paying it off promptly.
Step-by-step explanation:
When considering Allison's debts and the annual interest rates associated with each, it's evident that credit cards can carry significantly higher interest rates compared to other forms of borrowing such as car loans, lines of credit, student loans, or consolidated debt. In the case of Allison's credit card debt, the 26.99% interest rate far exceeds the average rate mentioned, which is around 15%. Understanding these rates is crucial in determining how to prioritize and pay off debt.
The broader context of credit card borrowing in the United States reveals that millions of Americans carry credit card balances, contributing to the vast amounts paid annually in interest charges. The fact that credit cards can have interest rates fluctuating between 12% to 18% or higher makes them one of the more expensive borrowing options available. This is why many financial advisors suggest paying off credit card debt first, especially those with interest rates above the general 15% average, as in the case of Allison's 26.99% rate on her credit card debt.