Many Americans are in a battle with their credit card debt and are stuck in a vicious cycle of seemingly never-ending payments. Holding large credit card balances, in which you may be struggling to keep up with, not only impacts your cash flow, credit score and overall financial health, it also can affect your physical well-being if it is causing you stress. While it may seem impossible to dig yourself out of all of this debt, there are ways you can conquer and win the credit card debt battle.
Taking out a personal loan can be a good way to pay off your credit card debt, but you should also be aware of the pitfalls. Here is some insight into understanding what a personal loan is, as well as the pros and cons that come along with it.
What Does it Mean When You Pay Off Credit Card Debt With a Personal Loan:
Paying off credit card debt with a personal loan typically falls under the category of a “credit card consolidation loan." Credit card consolidation loans are term loans in which the borrower will have a repayment plan, and the debt will be paid within a definitive time frame with a set interest rate. Having a set interest rate and time frame can be helpful in keeping track of how much interest you are actually paying for the duration of the loan as opposed to carrying credit card balances. Carrying a credit card balance each month could cost you more in interest than you may have anticipated if you only pay the minimum amount required.
"Consolidating your high-interest credit cards into a personal loan with a lower interest rate could save you a significant amount of money in the long run"
The Pros in Paying Off Credit Card Debt With a Personal Loan:
Obtain a Lower Interest Rate:
While it's not guaranteed, you may be able to get a lower interest rate than you currently have on your credit cards. Consolidating your high-interest credit cards into a personal loan with a lower interest rate could save you a significant amount of money in the long run. Having a fixed interest rate for the duration of the loan will keep your monthly payments the same each month and will help you better budget and keep track of you expenses each month.
One Single Monthly Payment
If you hold numerous credit cards with high balances, consolidating them all into one personal loan will give you a single balance under one interest rate. Not only does this make managing your credit card debt simple, but it can also help you keep better track of your finances as well as making on-time payments. Having a single monthly payment may be beneficial to those who may be prone to financial procrastination and have a hard time managing their finances. It could also be a good opportunity to “turn over a new leaf" and embrace financial literacy as well as embark on a journey to a debt-free life.
Quicker pay-off time
Unlike credit cards, a personal loan can be paid off in a shorter amount of time. Credit cards do not have a set repayment period. When only paying the minimum amount required on credit cards, you could be facing decades of payments, leaving you with double or even triple the original balance. Try comparing how long it will take you to pay off a personal loan as opposed to sticking to making monthly minimum payments. Making a comparison will be easy to do because every credit card company is required by the Credit Card Accountability, Responsibility, and Disclosure Act (CARD) to have an explanation on statements as to how long it will take you to pay off the credit card debt if you just make the minimum payments. Having this information may not only be an eye-opener but can help you make your decision on opting for a personal loan.
The Cons of paying off credit card debt with a personal loan:
Interest Rate Could Be Higher
Typically the interest rates on personal loans are lower than the interest rates associated with credit cards. However, the interest rate you are given will depend on whether or not you have good credit. If your credit is less than desirable, then you may not getter a better interest rate deal. Even those who are considered to have good credit may not get an interest rate that would make sense to opt for a consolidation loan. It's always important to do your homework and make comparisons to decide what will work best for your individual financial situation.
Monthly Payment May Not Work Within Your Budget
You may very well be able to obtain a personal loan to pay off your credit cards. However, you have to make sure that the monthly amount fits within your budget. If you don't think you can swing the monthly payment on your current budget, see where you can make cuts to your expenses that will work and make sense.
If the payments are not affordable, then you may have to seek other options in paying off your credit card debt. For example, you may have to take on a side-job to bring in more income to pay more than your minimum balance or cut back on expenses such as dining out and cable bills.
"If your credit is less than desirable, then you may not getter a better interest rate deal. Even those who are considered to have good credit may not get an interest rate that would make sense to opt for a consolidation loan"
Fees May Be Involved
Before signing on the dotted line, make sure you read the fine print. Some personal loans may have origination fees that may add a substantial amount to the loan. Make sure that the fees do not outweigh the benefit of consolidating your credit card balances.
If you decide to opt for a personal loan to pay off your credit cards, it's extremely important to understand how you got into credit card debt in the first place. Get to the root of the problem, so it doesn't happen again. If your credit card debt was due to impulse buying and poor spending habits and you don't take action to correct the behavior, then taking out a personal loan to pay off your credit cards will only be a temporary fix. Create a budget to keep track of how much you have coming in vs. how much is going out for expenses. Whether you have credit card debt or not, Budgeting is a great tool for everyone, and by utilizing a budget, you will be on your way to a debt-free future!
Marriage can be a tightrope act: when everything is in balance, it is bliss and you feel safe, but once things get shaky, you are unsure about next steps. Add outside forces into the equation like kids, work, finances or a personal crisis and now there's a strong chance that you'll need extra support to keep you from falling.
My husband and I are no strangers to misunderstandings, which are expected in any relationship, but after 7 years of marriage, we were really being tested on how strong our bond was and it had nothing to do with the "7-year itch"--it was when I was diagnosed with PTSD. As a survivor of child sexual abuse who is a perfectionist, I felt guilty about not being the "perfect partner" in our relationship; frustrated that I might be triggered while being intimate; and worried about being seen as broken or weak because of panic attacks. My defense mechanism is to not need anyone, yet my biggest fear is often abandonment.
I am not a trained therapist or relationship expert, but since 2016, I have learned a lot about managing survivorship and PTSD triggers while being in a heterosexual marriage, so I am now sharing some of my practical relationship advice to the partners of survivors to support my fellow female survivors who may be struggling to have a stronger voice in their relationship. Partners of survivors have needs too during this process, but before those needs can be met, they need to understand how to support their survivor partner, and it isn't always an easy path to navigate.
To my fellow survivor sisters in romantic relationships, I write these tips from the perspective of giving advice to your partner, so schedule some quality time to talk with your boo and read these tips together.
I challenge you both to discuss if my advice resonates with you or not! Ultimately, it will help both of you develop an open line of communication about needs, boundaries, triggers and loving one another long-term.
1. To Be or Not to Be Sexy: Your survivor partner probably wants to feel sexy, but is ambivalent about sex. She was a sexual object to someone else and that can wreak havoc on her self-esteem and intimate relationships. She may want you to find her sexy and yet not want to actually be intimate with you. Talk to her about her needs in the bedroom, what will make her feel safe, what will make her feel sexy but not objectified, and remind her that you are attracted to her for a multitude or reasons--not just because of her physical appearance.
2. Safe Words = Safer Sex: Believe it or not, your partner's mind is probably wondering while you are intimate (yep, she isn't just thinking about how amazing you are, ha!). Negative thoughts can flash through her mind depending on her body position, things you say, how she feels, etc. Have a word that you agree on that she can say if she needs a break. It could be as simple as "pause," but it needs to be respected and not questioned so that she knows when it is used, you won't assume that you can sweet talk her into continuing. This doesn't have to be a bedroom only rule. Daytime physical touch or actions could warrant the safe word, as well.
3. Let Her Reconnect: Both partners need attention in a relationship, but sometimes a survivor is distracted. Maybe she was triggered that day, feels sad or her defense mechanisms are up because you did something to upset her and you didn't even know it (and she doesn't know how to explain what happened). If she is distant, ask her if she needs some time alone. Maybe she does, maybe she doesn't, but acknowledging that you can sense some internal conflict will go a long way. Sometimes giving her the space to reconnect with herself before expecting her to be able to focus on you/your needs is just what she needs to be reminded that she is safe and loved in this relationship.
4. Take the 5 Love Languages(r) Test: If you haven't read this book yet or taken the test, please at the very least take the free quiz to learn your individual love language. My top love language was Touch and Words of Affirmation before remembering my abuse and thereafter it became Acts of Service and Words of Affirmation. Knowing how your survivor partner prefers to be shown love goes a long way and it will in turn help your needs be met, as they might be different.
5. Be Patient: I know it might be frustrating at times and you can't possibly totally understand what your survivor partner is going through, but patience goes a long way. If your survivor partner is going through the early stages of PTSD, she feels like a lot of her emotional well-being is out of her control. Panic attacks are scary and there are triggers everywhere in society. For example, studies have shown that sexual references are made anywhere from 8 to 10 times during one hour of prime time television (source: Journal of Broadcasting & Electronic Media). My husband is now on high alert when we watch TV and film. He quickly paused a Game of Thrones episode when we started season 2 because he realized a potentially violent sexual scene was coming up, and ultimately we turned it off and never watched the series again. He didn't make a big deal about it and I was relieved.
6. Courage to Heal, Together: The Courage to Heal book has been around for many years and it supported me well during the onset of my first flashbacks of my abuse. At the back of the book is a partners section for couples to read together. I highly recommend it so that you can try to understand from a psychological, physical and emotional stand point what your survivor partner is grappling with and how the two of you can support one another on the path of healing and enjoying life together.