Financial advisers often say that one of the best things to do with extra money is to pay off credit card debt; eliminating credit card debt is financially advantageous for many reasons.
Interest Rates
Credit card debt typically carries higher interest rates than other debts like mortgages, personal loans and student loans; paying off credit card debt first will translate into less money spent on interest.
Payment Scheme
Many credit cards allow minimum payments that primarily go toward interest owed. If payments are not made in excess of minimums it can take many years to pay off debt.
Credit Score
Eliminating credit card debt will improve your credit scores which can allow for higher credit limits and better rates on new loans.
Wealth
Eliminating credit card debt can allow you to focus on saving and investing money which will amount to more wealth in the long term.
Stress
Credit card debt can be financially stressful; eliminating debt simplifies finances and can reduce the number of bills to pay each month.
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