Credit cards have become very integrated into the lifestyle of many consumers. But there can be unpleasant consequences if you get too comfortable with credit card debt. Here are some ideas on how to pay off credit card debt and why it should be a priority.
Why is credit card debt so dangerous?
Outside of payday loans, credit card debt is just about the most dangerous form. There are several reasons why a credit card balance can be so disastrous for your financial health. These reasons are so intense that recent studies have shown that people with persistent credit card debt suffer from physical ailments later in life. According to an article from New York Times:
“The new research leveraged Department of Labor data to analyze the financial health of nearly 7,900 baby boomers over more than a decade, from ages 28 to 40, as well as their physical health at age 50. It found that people who had persistently high levels of unsecured debt were 76% more likely to have pain that interfered with their daily life than people without unsecured debt.
So what about credit card debt that makes it so bad for you? There are two elements in credit cards that work in tandem which, when left unchecked, can absolutely ruin your life.
The first problem with credit cards is that they’re extremely easy to use and don’t force you to stop spending at a healthy limit like you do with debit cards or cash. When you pay on credit, you can buy a lot more than is actually affordable for your budget. You only have to do this once to find yourself in a perpetual cycle of debt.
And what keeps you in this cycle of debt? High interest rates. Credit card balances come with notoriously high interest rates, often over 20%. If you don’t pay off your entire balance each month, it can continue to grow and grow. It makes sense that credit card companies want to charge a higher interest rate because they offer unsecured debt with few requirements. But many consumers, whether out of want or need, are unable to stop themselves from overspending on their credit cards. Doing this can put you in such a pernicious cycle that it will affect your physical well-being.
How to pay off credit card debt
If you’re looking for help with your credit card debt, you want to make a plan to pay it off as soon as possible. The longer you wait to pay off your credit card debt, the more damage it will cause to your life.
Using debt repayment strategies such as the snowball or avalanche methods can be helpful in freeing yourself from credit card debt. With the snowball method, you pay your smaller bills first and work your way up from there. The idea is that as you gain momentum, you are more likely to pursue debt repayment. Using the avalanche approach will save you the most money. This is because you are paying off your debts in order of highest interest rates.
Some people might also be able to use credit card balance transfers to help pay off their debt faster. This is where you transfer your credit card balances to a new account that offers a low introductory interest rate. This can help you pay off your debts without accumulating interest for a period of time.
What to do if you can’t pay off your credit cards
Some people will find that none of these strategies are enough to help them get out of credit card debt. For people in this boat, it might be time to start looking for more intensive options, such as debt relief. Work with Debt Relief Freedom is in some ways the ultimate credit card debt helper for consumers.
When you find the right debt relief partner, you have the opportunity to finally free yourself from your oppressive debt, and in just a fraction of the time. This is possible because companies like Freedom Debt Relief can negotiate with your lenders in order to reach a settlement. While it’s not the right path for everyone, those who haven’t been able to find credit card debt help elsewhere may finally be able to get their finances back. If you are too much debt, it may be time to finally seek help with your credit card debt. It can be a tough decision, but it will be worth it if you can get your life back on track.