There is not anything that feels better than making a final credit card payment. After a few months, or even several years, of living with the stress of higher-cost credit card debt, achieving that zero balance is something that is worth celebrating.
When someone pays off their credit card debt, it is great. But that is not all. It will also free a person up to do other things, make additional plans, and more. It is possible to learn about Debthunch and find out more about this, or just keep reading. The biggest benefits offered by paying off credit card debt are found below.
Most people already realize how stressful debt can be. Paying this debt off feels great. A person can spend less of their time worrying about money, and they can forget about late fees, collection calls, and high-interest charges. A person may even find out they are happier and able to get a better night’s sleep when they are finally out of debt.
When someone has a high credit card balance, the lender is charging the individual interest, which is a fee that is determined by a percent of the balance on the card. Based on the interest rate a person owes, this may result in over $100 each month in additional debt. With a zero balance, there are zero fees. This also means more money in the person’s pocket.
Tackle Other Debts
Most people have more than one source of debt. When they get rid of high-interest credit card debt, they can finally start chipping away at student loans and other debts that have not been getting as much attention as they should.
Pay Off the Mortgage
When someone purchases a home, it is one of the biggest investments they will ever make (in most cases). Most people do not have the cash on hand to purchase the home outright. This results in them taking out a mortgage. When credit card debt is finally repaid, it means the person can begin paying more on their mortgage, which means they will own their house sooner than expected.
Save Up for a Down Payment on a New Home
When someone is dealing with significant debt, it can make it impossible to save for longer-term goals. For many people who are struggling to cover the costs of high-interest credit card debt, owning a home may seem impossible. After all, significant funds are needed to make a down payment.
Build an Emergency Fund
Most experts in the finance industry agree that every person needs to set aside between three and six months of living expenses as a safety net. Issues related to the loss of a job or an unexpected illness do not have to be postponed when this emergency fund is in place.
When it comes to paying off credit card debt, there are several benefits offered. Being informed and knowing what to expect when credit cards are finally eliminated can help someone achieve this goal.