The sooner you can shed your debt, the better.
- New data reveals that a large number of Americans owe sizable credit card balances.
- There are steps you can take to consolidate your credit card debt and make it more affordable to pay off.
Credit cards are a convenient financial tool — one that 88% of working Americans like to use, according to Salary Finance’s fourth annual report. But of those, about one-third consistently carry a balance forward from one month to the next. And among those who do, 41% carry a balance of over $3,000.
The problem with carrying a balance, however, is twofold. First, the longer you owe money on your credit cards, the more interest you’ll rack up. That’s effectively the same thing as throwing money away.
Plus, too much credit card debt could cause damage to your credit score. And once that number drops, borrowing could become more difficult.
If you owe a fairly large sum on your credit cards, it’s important you pay it off as quickly as possible. Here are some options that can make your debt more affordable, thereby setting the stage for a faster payoff.
1. Do a balance transfer
A balance transfer lets you move your existing credit card balances onto a single card. Why is that advantageous? Many balance transfer cards come with a 0% introductory interest rate. And if you get a break from racking up interest on your debt, it can make it easier to get out of the hole you’re in.
Of course, those introductory periods don’t last forever. But if you manage to snag a 12- or 15-month reprieve from accruing interest, it could make a big difference.
2. Take out a personal loan
With a personal loan, you borrow a lump sum of money you can use for any purpose. If you take out a personal loan, you can use your proceeds to pay off your credit cards, leaving you with just that loan balance to tackle.
Why is that helpful? Personal loans commonly charge less interest than credit cards. If you manage to slash the interest rate on your debt, it becomes less expensive and easier to pay off.
3. Tap your home equity
If you own a home you have equity in, you can borrow against it …….