Credit card debts can completely end the peace of mind and financial stability of your home. An overwhelming debt, especially when distributed on multiple cards with high interest rates, causes stress, anxiety and extreme financial limitations that are known to harm or end marriages. But whether you are married or single, in college or near retirement, have $ 1,000 or $ 50,000 in credit card debt, the feeling remains the same: despair, hopelessness and an overwhelming feeling of being trapped.
First of all, he is not alone. The average American has a credit card balance of $ 6,400, an increase of three percent over last year. The average household owes $ 17,000, paying around $ 1,300 in interest only each year. In addition, total credit card debt has reached its highest point in history, as it exceeds the $ 1 billion figure in the United States.
Claiming your financial freedom can be a scary prospect, especially when you face many different credit cards, all with different rates and due dates. If your calendar is full of several payment due dates, this makes it even more likely to miss a deadline and then more charges will be imposed in addition to the interest you are paying. All that lost money is also a lost opportunity.
How can you buy the house you wanted, take those vacations you always wanted, or pay your child’s private school education when you have a credit card debt each month? Maybe you think it will never come out of that. That’s where he is wrong. There is a way and it is called a personal loan.
Wisefox Credit offers affordable personal loans to pay off credit card debts that facilitate the payment of your credit cards with a single low monthly payment, a fixed APR and a fixed term. When you choose to refinance your credit card with us, your monthly payment never changes, you always know what your balance is and how much it will take to pay it.
Imagine a credit card debt free life with a loan that offers much better conditions, less expensive interest rates and another life opportunity you really want. The best thing is that you even have the opportunity to improve and maintain your credit score, which facilitates the purchase of things that really contribute to your quality of life, such as a house or a car.
Financial freedom begins with a personal loan to refinance your credit card. But how can you go that way?
Let’s start by saying that getting a personal loan to pay off credit cards is not very logical for everyone and for every situation. The choice to do so will depend on many factors, from the amount of debt you have to the amount of interest you are paying and the actual savings you could benefit from doing so.
Keep in mind that your credit card debt will not disappear. It is still there, but in a different place with better terms and rates. In addition, everything accumulates in a single payment so you don’t have to worry about juggling several different expiration dates.
Sitting with a trusted financial expert will be the only way you can really know if this is the right course of action for you. However, in the meantime, here are some cases in which it may be useful to use a personal loan to pay off your credit cards.
A personal loan can help you …
Lower your interest rates
The reduction of the annual interest rate of your debts is probably the main reason why you are considering a personal loan. However, numbers must be processed carefully. A personal loan would be meaningless if you do nothing to reduce the interest rate you are currently paying. It has to make sense. Paying a lower interest rate will allow you to pay more of the capital each month so you can get out of debt faster, reducing the total cost of your debt.
Consolidate all payments into one
Consolidating several credit card payments into a single loan that is easy to remember to pay each month is another important reason to follow this path. That payment will look great, but it includes all your smaller balances in one so you can concentrate on making just one check per month.
However, a key point of all this is to stop accumulating credit card debts after unification. Cut all your cards except one for emergencies. Set a budget and follow it. After all, what will all this do if you only increase those balances again? You will have to reassess how you think about money, what your priorities are and how you will change your spending habits to be more in tune with your new financial perspective.
Stop the cycle and take a look at your budget to avoid ending up in the same situation a few years later.
Reduce your monthly payments
Not only can you reduce your interest rates, you can also reduce your total monthly payments on any debt incurred. It may be that your minimum monthly payment for a single personal loan is less than the total of all minimum monthly payments on your credit card. When you reduce your monthly payment, you create a debt snowball that will help you pay off your loan faster.
Let’s say you originally paid $ 500 a month in minimum payments to your credit cards, but now you only pay $ 400 per month for your loan. Theoretically, you could apply those savings of $ 100 per month directly to the loan capital and pay the debt faster.