For example, let’s say you are carrying a balance on a credit card with an 18% interest rate. Unless you allocate the unexpected funds into a savings or investment account that outpaces the 18% interest rate on your credit card, you will be losing money in the long run. In addition to high-interest debt often overtaking most savings or investment rates, there are other benefits in using the funds to pay down debt, such as making a positive impact on your credit score. Your credit utilization ratio––the amount of credit you are currently using compared to how much credit is available to you––accounts for a significant portion of your credit score.

If you don’t have the cash to pay down high-interest debt, we may be able to help you! We have debt consolidation loans, Visa credit cards—with a low 9.9% APR, or perhaps a home equity loan. If you are struggling with high-interest loans or credit card balances, come in and talk to one of our friendly loan officers to see if one of these options would work for you!