How Stimulus Payments Can Help With Any Debt
Credit card debt can be overwhelming, seems to grow quickly, and sometimes it’s easier to avoid. However, with the stimulus payment from the IRS, paying down any debts is closer than you think. Here are some quick reasons to use your stimulus money to help pay off any debt.
You’ll Pay Less Interest
One of the biggest reasons to pay down any debt, is to decrease the interest you’re paying. Credit card companies charge interest on any remaining balance you don’t pay off, when you receive your credit card statement.
The amount of interest you’re paying changes based on your credit card balance. The amount of interest you pay decreases, as you pay off your balance.
Your Annual Percentage Rate (APR) determines the percentage rate of how much interest you pay. It’s important to pay off higher interest rates first, so you won’t need to pay as much interest.
Your Credit Score Can Increase
As your credit balance decreases, your credit score can increase. Your credit utilization is a big factor in determining your credit score.
Having a high credit score is important for many reasons. It can help you obtain a lower APR for any future loans you may need, including mortgage loans, car loans, or future credit cards. It also helps in any financial reason your credit is checked.
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