It is easy to run up a high debt balance on a credit card. Credit cards may carry interest rates as high as 30 percent as well as added penalties and fees for late payments. It is in one’s best interests to pay off credit card debts as soon as possible before tackling other lower-interest debt balances.
There are several ways that individuals can pay off their credit card debts more quickly. People who have good credit might be able to secure personal loans from their credit unions or bank and use that money to pay the credit card balances off. Because they have significantly lower interest rates, personal loans make sense for individuals who are eligible for them.
Some people tackle their credit card debt by transferring the balance on a high-interest account to a card with a lower interest rate. Those with whole life insurance policies might be able to take loans from their policies to pay down their debts. Similarly, people who have 401(k) accounts may borrow against them and then repay themselves over a period of up to five years. A final option for homeowners who have equity in their homes is to apply for a home equity loan to pay off their credit card debts.
After eliminating debt, it’s important to not run credit card balances back up. Those who do will have both the loan and the new credit card balances to pay. People who are overwhelmed by credit card debt might want to consider bankruptcy as an option. Bankruptcy might help a debtor resolve their financial challenges and receive a fresh start.