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Top Ten Reasons to Pay Off Your Credit Card Debt
More than 43 percent of Americans currently owe more in debt than they earn. Credit cards can quickly become a difficult burden to bear with high interest rates. That’s why paying them off is such an important decision to make. Need more reasons? We have ten for you!
1. Pay Less Interest
Paying off your credit cards will save you a lot in interest costs. Depending on your amount of debt and interest rate, you could end up saving thousands of dollars in the long run. We’d say that is pretty significant.
2. Reduce Stress
Having credit card debt only adds stress to your life. You have to remember to pay the bills, and it is a threat to your financial security. The stress factors are endless. Paying off your cards will help alleviate that stress.
3. Attain Financial Security
Credit card debt is a serious threat to your financial security. It prevents you from making the most of your income. The money that is put towards paying card bills could be saved for a rainy day, emergencies, your children’s college, etc. Paying off your cards put you one step closer to that security.
4. Improve Your Credit Score
Credit utilization is one of the most important factors when considering your credit score. Credit utilization is the amount of your debt in relation to your credit limit. It is recommended to keep this number below 30 percent. As you pay down your cards, your utilization score will drop, improving your credit score.
5. Increase Your Future Earnings
When you allow debt to pile up on credit cards, you are ultimately taking money away from yourself in the future. If you pay off your credit card debt now, you will have more money later on, increasing your future earnings and financial security.
6. Contribute to Your Retirement Plan
That’s right. When you don’t have a lot of credit card debt, you can put money towards the things that really matter, like saving for your golden years.
7. Reduce the Number of Bills You Pay
We know this is obvious, but when considering credit card debt, many people don’t immediately see the obvious. If you pay off your credit card debt, you will have less bills to pay each month.
8. Qualify for Mortgage or Car Loans
If you are at the point in your life where you want to buy a house or car, paying off that credit card debt can help you qualify for the loans necessary to those big purchases.
9. Take a Vacation
Paying off debt can mean taking that vacation you have wanted for so long without feeling guilty about spending the extra money. No credit card debt means vacation freedom!
10. Start Next Year Debt-Free
The best reason of all, you can begin next year without the “pay off credit card debt” on your resolutions list.
If you have questions or need help creating a plan to paying off your credit card debt, contact one of our credit counselors. They can help you put together a plan for paying down credit cards and answer any questions you might have.