Credit card debt can put a stranglehold on the peace of mind and financial stability of your household. Crippling debt, especially when spread out over multiple cards with high interest rates, causes stress, anxiety and extreme financial limitations that have been known to strain or end marriages. But whether you’re married or single, in college or approaching retirement years, have $1,000 in credit card debt or $50,000, the feeling is still the same: despair, hopelessness, and an overwhelming feeling of being trapped.
First off, you’re not alone. The average American has a credit card balance of $6,400, an increase of three percent from last year. The average household owes $17,000, paying about $1,300 in interest alone each year. On top of that, total credit card debt has reached its highest point in history, as it surpasses $1 trillion in the United States.
Reclaiming your financial freedom can be a terrifying prospect, especially when faced with many different credit cards all at different rates and due dates. If your calendar is littered with various payment due dates, this makes it even more likely that you will overlook a deadline and then be subjected to even more fees on top of the interest you’re paying. All of that lost money is also lost opportunity.
How can you possibly buy that house you wanted, take that vacation you’ve always been meaning to take or pay for your child’s private school education when you’re saddled by credit card debt month in and month out? You may think you’ll never get out from under it. That’s where you’re wrong. There is a way and it’s called a personal loan.
Credit Direct offers affordable personal loans to pay off credit card debt that make it easy to pay off your credit cards with just one low monthly payment, a fixed APR and a set term. When you opt for credit card refinancing with us, your monthly payment never changes, you always know what your balance is, and you always know how long it will take to pay it off.
Imagine a life free of credit card debt with a loan that offers far better terms, less costly interest fees, and another shot at the life you really want. The best part is, you even have a chance at improving and maintaining your credit score, which makes it easier to buy the things that truly contribute to the quality of your life, such as a home or car.
Financial freedom starts with a personal loan for credit card refinancing. But how can you navigate that road?
Let’s begin by saying that taking out a personal loan to pay off credit cards doesn’t make sense for everybody and every situation. The choice to do so will depend on many factors, from how much debt you have to how much interest you’re paying to the actual savings you could benefit from by doing so.
Keep in mind that your credit card debt won’t go away. It’s still there, but in a different place with better terms and rates. Plus, it’s all rolled into one payment so you don’t have to worry about juggling several different due dates.
Sitting down with a trusted financial expert will be the only way you can truly know if this is the right course of action for you. However, in the meantime, here are some instances where it may be helpful to use a personal loan to pay down your credit cards.
A personal loan can help you…
Lower Your Interest Rates
Lowering the annual interst rate of your debts is probably the main reason you’re considering a personal loan. However, the numbers have to be crunched carefully. A personal loan wouldn’t make sense if it does nothing to lower the interest rate that you’re currently paying. It has to make sense on paper. Paying a lower interest rate will make it possible to pay off more of the principal each month so you can get out of debt faster, reducing the total cost of your debt.
Consolidate Payments Into One
Consolidating several credit card payments into one loan that’s easy to remember to pay each month is another big reason for going this route. That one payment will seem big but it contains all your smaller balances in one so you can concentrate on writing out just one check a month.
A key takeaway from all this, though, is to stop racking up credit card debt after consolidation. Cut up all your cards except one for emergencies. Set up a budget and stick to it. After all, what good will this all do if you’re just going to build up those balances again? You’ll need to re-evaluate how you think about money, what your priorities are, and how you will change your spending habits to be more in line with your new financial outlook.
Stop the cycle and take a good long look at your budget to avoid ending up in the same situation a few years down the line.
Lower Your Monthly Payments
Not only can you lower your interest rates, you can also lower your total monthly payments for any owed debts. You may find that your monthly minimum payment for just one personal loan is lower than the total of all your credit card minimum monthly payments. When you lower your monthly payment, you create a debt snowball that will help you pay off your loan faster.
Let’s say you originally were paying $500 a month in minimum payments to your credit cards, but now you’re only paying $400 per month on your loan. You could theoretically apply that $100 savings per month directly to the loan’s principal and pay the debt down faster.
The Bottom Line
If you aren’t saving cash by re-structuring your credit card debts with a personal loan, either through reducing your monthly payments or by decreasing your interest rates, you probably shouldn’t consider restructuring. It should be well worth your while to move your money around, not add to your stress for no benefit.
By insisting on a lower interest rate for your debt and lowering your monthly payment, you’re well on your way to paying off your debt faster and taking back control over your finances. Breathe easy knowing you may not be out of debt just yet but have a solid plan in place that’s saving you money and getting you out from under the thumb of the credit card companies.
Contact Credit Direct
The process of applying for a personal loan for credit card consolidation through Credit Direct is fast and easy. Apply now and fill out our online form. We’ll get back to you with an answer within 24 hours. We offer personal loans of up to $40,000 to help you consolidate your credit card debt. Whether you decide to pay off one card, two cards or five cards, we can help with a personal loan to pay off credit card debt.