Credit Cards

35% of Americans lose sleep over their debt. Here’s how to handle yours

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It’s time to break that cycle.

Key points

  • A recent survey reveals that debt has a negative impact on the health of consumers.
  • Finding an efficient way to pay off yours could get you out of debt sooner.
  • Getting a personal loan or a cash-out refinance could be the answer.

There are certain types of debt that are somewhat unavoidable. Most people, for example, can’t buy a house outright, so they take out a mortgage and pay it off over time.

That shouldn’t necessarily be a source of stress. But credit card debt is another story.

Credit card debt is considered an unhealthy type. That’s because credit cards are notorious for charging high levels of interest. Also, too much credit card debt could hurt your credit score. That could, in turn, make it more difficult to borrow the next time such a need arises.

But credit card debt isn’t just bad for your finances. It could also be bad for your health. In a recent Self Financial survey, nearly 35% of adults with debt regularly lose sleep over it. That’s not good.

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If you’re in debt, it’s worth coming up with a plan to get rid of it as quickly as possible. Here are some options to consider.

1. Make a balance transfer

A balance transfer won’t eliminate your debt, but it could make it much less expensive to pay. If you can transfer your existing credit card balances to a new card with a 0% introductory APR, you’ll get a break from accruing interest for a period of time. That could make it easier for you to get out of debt sooner.

2. Take out a personal loan

A personal loan allows you to borrow money for any purpose. At first glance, you might think that a personal loan won’t do you much good, since you’re simply exchanging one type of debt for another. But the benefit of getting a personal loan is enjoying a much lower interest rate on your debt. If you use your loan balance to pay off your credit cards, you may find it easier to pay it down.

3. Refinance with cash out

If you own a home, you may be able to pay off your credit card debt without raising your monthly mortgage payment too much. A cash-out refinance allows you to borrow more than the remaining balance on your home loan. And if you qualify for a much lower interest rate on your mortgage than what you’re paying now, you may be able to refinance in a way that allows you to pay off your credit cards while keeping virtually the same monthly home payment as you used to. for.

Even if you end up with a higher mortgage payment after doing a cash-out refinance, you’ll usually get a much lower interest rate on a new mortgage than even a less expensive credit card would charge. So, all in all, you’re looking for a cheaper way to pay off your credit cards.

Persistent debt can change your outlook for the worse. It can also lead to a situation where you’re up at night worrying about how you’re going to pay for it. If you have more debt than you’re comfortable with, consider using one of these strategies to get out of that cycle sooner. Your health could depend on it.

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