Your net worth is the sum of all your assets minus liabilities. When you want to pay down high interest debt like credit card debt, you might want to leverage the power of your financial assets to make it happen.
Here are some sources you might use to pay down credit card debt:
1. Your home – Your home is a great source of inexpensive capital. A home equity line of credit or a second mortgage might help you pay down your credit card balances quickly. Homeowners find that mortgage interest rates are often a fraction of credit card rates, making it possible to reduce the size of your monthly payments and duration of your credit card repayment schedule.
2. Your car – Cars can be refinanced for longer payment durations, reducing your total monthly payment. Consider using the monthly savings to pay more towards your credit card balances. Doing so will significantly reduce the amount of time it takes to pay off a credit card debt.
3. Your income – Your income is an asset just like any other. By leveraging the power of your monthly income for a personal loan, you can consolidate high-interest credit card balances to reduce your monthly expenses. Alternatively, use your income to get a new credit card with introductory balance transfer interest rates to finance your debt at an interest rate as low as 0% per year.
Consider tapping your most valuable assets to improve monthly cash flow. Paying less interest to credit card companies helps you save more for the future, while using credit cards responsibly to boost your credit score.