Specialists point out the secret to financial tranquility

Spending less and saving more are worthy goals. Paying off debts, however, is the key to success in achieving financial peace of mind.

Collectively, Americans owe more than a trillion dollars on credit cards alone.

After the holidays, individual balances went up another notch. Americans, on average, racked up about 1TP4Q1,325 in holiday debt last month, according to MagnifyMoney's annual post-holiday debt survey.

Plus, more than three-quarters of those surveyed said they won't pay off their balances in full by the end of January, which means they'll add hefty interest charges to those bills, too.

From month to month, credit cards are one of the most expensive ways to borrow money. Card rates are now at 17.4%, on average, just slightly below the record of 17.85% in July. Still, many Americans continue to borrow ever larger amounts. About 35% of cardholders are starting 2020 with more credit card debt than they did at the start of 2019, according to the latest CompareCards survey.

And credit cards are – by far – the most popular type of debt, followed by car loans, mortgages, student loans and medical debt.

"Debt is a major obstacle to reaching financial goals, from everything to buying a home and retirement," said Carrie Schwab-Pomerantz, chair of the board of directors and president of the Charles Schwab Foundation.

“It affects people of all ages and backgrounds, at different stages of life. Borrowing is easy enough, the hard part is paying it back."

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US households with revolving credit card debt owe about $7,000, costing them roughly $1,100 a year in interest payments, according to NerdWallet's 2019 Household Debt Study.

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If you made only the minimum payments on a balance of $7,000, it would take you 21 years to pay it off, and you'd spend more than $8,900 in interest during that time, NerdWallet found, assuming an interest rate of just over 16%.

At the same time, nearly one in three Americans said paying off debt was their top financial goal for the new year, according to a separate Policygenius survey.

To tackle that kind of balance much more effectively, here are some tactics to pay off debt once and for all and finally have financial peace of mind.