GREAT! Every since I paid off the remainder of my credit card debt, I feel alot better about my finances. It seems as if a huge burden has been lifted. I advise anyone that if you pay off your debt, you will feel much better about your finances and life in general.
If you need more reasons to pay off debt, consider this:
- Better Cash Flow. Working on my budget for December, I had to figure out what to do with the extra $400 I am not sending to the credit card company. This is great problem to have.
- Better Financial Flexibility. It's nice not having to try and figure out how to stretch your paycheck to cover all of your monthly obligations.
- Higher Interest Rates. Your lenders will charge you higher rates because they will see you as a greater credit risk.
- Interest Savings. Don't let the credit card companies get rich off you. Save the interest you would be paying to a credit card company! Invest and make it work for you.
- Better Credit Score. One of the major components of your credit score is the amount of debt you are carrying. Carry less debt, the higher your credit score. My credit scores before I paid off my debt are 707 Transunion, 706 Experian and 694 with Equifax. I'm looking forward to see how my credit scores increase.
- Reduced Availability of Credit. If you are looking to purchase a home, the amount of debt you carry will affect the amount of the mortgage you are able to qualify for.
I can't believe how much of a psychological boost paying off debt gave me. My next loan to tackle is my car loan. Once I get this paid off, I will be in a much better position mentally and financially. I also never plan to finance another car, if I do, I plan to put at least 50% down and finance for no longer than 3 years.