Americans have a total of $683 billion in unpaid credit card balances according to MSN.com. More than 75 percent of people with outstanding credit card debt didn't have the funds to pay off even half of their balances.
Despite this enormous amount of outstanding debt, a survey of consumer finances by the Federal Reserve Board found the majority of U.S. households had no credit card debt, according to Credit Cards.com Creating a spending plan and eliminating credit card debt can pave the way toward financial freedom. There are many advantages to being debt free.
Financial Control
According to American Consumer News.com, when all of your debts are paid you will have so many more options than you did previously. You are able to control your money instead of handing most of it over to credit card holder, mortgage lenders and financial institutions. Since you won't have any monthly debt other than basic utilities and other fixed bills, you are much less likely to feel financially insecure should you become unemployed.
Reduced Stress
A mountain of debt can be an ongoing burden that rests on your shoulders. When you are debt-free there is relief from chronic worrying over budget issues and whether and/or not you can afford to pay certain bills.
A sense of financial freedom can reduce your stress level. For example, if you or someone in your family has taken a second job to help pay outstanding stand, that may no longer be necessary once you are out of debt.
Favorable Interest Rates
When you don't have any debt, you may be looked upon more favorably by lending institutions. Mastercard.com says once you've established proven money management skills you will be a good candidate for lower interest rates. This may help you achieve a long term goal such as owning a home.
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