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Living with credit card debt can take its toll on you physically and mentally. It may seem that the balances keep climbing no matter how hard you try.

High-interest rates on credit card balances can form the perfect storm where the monthly interest charges cancel out any payments you make. This cycle can create a debt spiral that feels impossible to escape.

While you may feel defeated, there are financial solutions available. However, not all solutions are the same, and some may cause even more challenges down the road.

Challenges with Credit Card Debt

Credit card debt comes with a bevy of challenges. Because of their convenience, many turn to credit cards first when making purchases – often without considering how they will repay the balance.

Some of the biggest challenges of credit card debt include:

  • Suppose you only make the minimum payment on your credit card. In that case, your payment primarily covers the interest due and any possible fees. Therefore, the principal balance owed declines minimally, and your debt level remains relatively unchanged.
  • When you can afford to make larger monthly payments, expensive interest costs may offset the benefit. If your credit card comes with high-interest rates, the monthly interest charged might cause your balance to go right back up to where it was or become even higher than where you started.

Sometimes it can seem like bankruptcy is the only solution, but that should always be your last resort. The damage to your credit from filing bankruptcy can limit your ability to borrow money in the future for up to 10 years resulting in a tough time receiving loans of any kind.

Finding the Right Solution

Recently, you may have noticed advertisements for apps promising to reduce your credit card debt. Most people don’t realize that these solutions often involve turning your high-interest credit card debt into high-interest personal loans. While this strategy may help pay off the debt sooner, it can still be quite costly.

Instead, consider a credit card consolidation loan from the credit union. This solution can help you eliminate high-interest rates, break free from the debt cycle, and save significant money in the long term. Best of all, you can see your pre-qualified rate and limit in two minutes or less, with no impact on your credit.

Consolidating Debt with the Credit Union

Consolidation can be an effective tool to help you get out of debt. It allows you to move your outstanding credit card balance(s) into a single, easier-to-manage, and lower-rate credit card from United Texas Credit Union.

Consolidating debt using a lower-rate credit card offers many benefits:

  • Flexible Payments: We can help you determine a fixed monthly payment within your budget that will ensure more of your money will be going toward your principal balance – reducing how much you owe.
  • Lower Interest Rates: Our credit cards tend to have lower interest rates than those from other credit card issuers. By paying less interest, more of your hard-earned dollars will go toward the principal portion of your debt – lowering your balance quicker.
  • Single Loan: Consolidating multiple cards into one credit card makes it significantly easier to manage your debt. Instead of juggling multiple payments and due dates monthly, you’ll only have one.
  • Fewer Fees: Our credit cards have no annual fee, no balance transfer fee, and no cash advance fee, so you can dedicate more of your hard-earned money toward paying down your debt, not paying fees.

Credit Card vs. Credit Card Consolidation Loan

If you’re still wondering how you can benefit from a Credit Card Consolidation Loan, here’s a quick example.

Credit Card Example

Suppose you have a credit card with the following attributes:

  • Balance: $10,000
  • Interest Rate: 28.49% APR

If you pay $300 per month, it will take you 67 months (5 years, 7 months) to repay the entire balance. The total interest paid would be $10,038.39.

Credit Card Consolidation Loan Example

Now, let’s say you decide to take advantage of a Credit Card Consolidation Loan:

  • Balance: $10,000
  • Interest Rate: 13.50% APR

With a monthly payment of $300.00, it will take you 43 months (3 years, 7 months) to repay the balance. That’s a whopping 2 years sooner than the credit card option. But that’s not all. You will also pay only $2,603.80 in interest – saving you $7,434.59 versus the credit card option!

We’re Here to Help!

Dealing with credit card debt often feels like an uphill battle. High-interest credit cards offered by banks and retailers can lock you into a debt spiral that is difficult to escape. But don’t worry – we’re here to help.

Our credit card consolidation loans will help you break free from this debt trap and put you on a plan to eliminate your credit card debt once and for all. If you’re interested in learning more about credit card consolidation loans, our team is ready to help. Please stop by any of our convenient branch locations or call 1-800-531-8456 to schedule an appointment.

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Each individual’s financial situation is unique. We encourage you to contact United Texas Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.

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