March 27, 2020

The Impact of Paying Off Credit Card Debt

It doesn’t matter how it started. Credit card debt can be a crippling financial burden. For many, credit card debt was not something they thought they’d need to deal with long term. Maybe you made some poor decisions, but maybe these decisions were forced on you by job loss or other unexpected expenses. No matter how you got into the situation, the important thing now is getting out of it. The impact of paying off credit card debt is significant.

Paying Off Credit Card Debt Opens Opportunities

When you have substantial credit card debt, your other borrowing opportunities may be limited. This means you may have a hard time getting a mortgage, a home equity loan, a car loan, or a student loan. The more you pay down your debt, the better your credit score will be and the more you’ll be able to take on “good debt” that can help your future.

Paying Off Credit Card Debt Helps Financial Security

When you have a large amount of debt, you are in a financially precarious position. You do not have control over your finances. If an emergency strikes, you probably will not have savings to dip into, and could find yourself at the mercy of your lenders. “When you aren’t saving, you aren’t having your money work for you, and you “own” very little of your life,” as Jeff Mohlman, debt elimination strategist, points out. Paying off credit card debt will reduce the amount of bills you juggle each month, allow you to create an emergency fund, and even start a nest egg.

Paying Off Credit Card Debt Is Good for Your Mental – and Physical – Health

Large amounts of debt are an enormous source of stress. Every month you’ll have stomach tightening and heart racing anxiety when balancing the bills. You’ll struggle to fall asleep as your mind races with scenarios of the bottom falling out. All this stress can manifest physically as well. Paying off credit card debt will lessen the stress on both your mind and your body.

Paying Off Credit Card Debt Teaches Your Kids Good Financial Habits

Your kids will learn from you. When they see you manage your debt, they’ll model those habits. Even if you aren’t in a place where you feel like a role model, kids will learn how they can solve their financial problems by facing them.

If you feel like you’re drowning in debt with no way out, speak to a financial expert about how to become debt free. We have a proven path to living debt free and we’d like to offer you a free consultation to discuss your financial health and guide you to a debt free future. Let’s talk today!

photo of Jeff Mohlman

By Jeff Mohlman

Jeffrey has developed a comprehensive network of financial planning and estate planning experts who work for their client’s short-term and long-term goals. Today, the approach he incorporates for his clients follows three basic tenets: 1) being debt-free, 2) maximizing after-tax retirement income, and 3) protecting their estate from unforeseen risks.