Paying off your credit card debt is one of the greatest accomplishments you can have in your life. If you’ve never been drowning in credit card debt you may not understand just how big of a deal it is. You see, credit card debt is different than any other kind of debt.
When you have a car loan and you owe $15,000, every payment you make will chip away at the principal while paying a portion in interest. You have a period of 3 years to pay it off. The way the debt works is simple, you get the total amount you borrowed for a car and divide by 36 months (plus interest of course). With a car loan, you know what your monthly payment is right now and what it’s going to be a year from now. You also know exactly when you will get rid of this debt.
With credit card debt, you never really know how much you should be paying. If you have a lot of credit card debt, you certainly can’t afford to pay all of it. You can also pay the minimum payment which will keep your account out of delinquent status.
But when will you finally be done with paying off your debt in full? Well they don’t actually tell you that. If you have a fairly large amount of debt at a high interest rate it could take you 5 years, 10 years, even 20 years to pay it off if you just continue making the minimum payments. Not only that but they can change your interest rate whenever they see fit, leaving you with even higher payments. After all is said and done, you may even end up paying your three times what your debt was due to all the interest charges.
So if you are completely drowning in credit card debt and there seems to be no end in sight to paying off your debt, consider getting a personal loan to pay off that debt. By doing so, you’ll get a fixed interest rate and a fixed length of time so you know exactly when you will be debt free once and for all.