Credit cards make many things possible. They make it possible to pay off medical bills that added up after a family health scare. They make it possible to get much-needed car repairs so you can get to work. They make it possible to splurge outside your means, figuring that you’ll pay it all off later.
And, when that debt starts to compound interest and pile up, they make it possible to live in a constant state of financial anxiety, too.
Fortunately, with debt consolidation, it’s possible to pay off your debt, and do it in a stress-free manner. If you’re dealing with significant amounts of credit card debt, and you feel like the stress is eating you alive, read on to learn more about how debt consolidation can help to relieve your worry, and your debt.
Why is debt so stressful?
On the face, this question is a no-brainer. Debt is a stressful burden because it seems as if it is never going away. You already work hard all month just to make enough money to get by. Stressful for anyone is that fact that some of that money goes towards minimally reducing a burdensome balance. With every cycle of compounding interest, that balance you’re paying toward feels like a force of nature rather than the result of useful purchases.
More than that, though, debt can have direct negative effects on your life that can lead to heightened levels of stress and anxiety. We can roughly divide these negative effects into two categories: emotional stress and material stress.
The emotional effects of debt
Debt has a far-reaching effect, beyond merely monetary. Finding oneself thrust into debt is often a precursor to various forms of emotional trauma.
In the May 2010 edition of the Journal of Health Economics, researchers Sarah Bridges and Richard Disney established “a positive association between subjective measures of financial well-being and psychological well-being.” In other words, the better off you are financially, the happier you are. The inverse, unfortunately, is also true. The worse off you are financially; the more depressed you tend to be.
Those findings are intuitive for anyone who has ever dealt with significant amounts of financial indebtedness. It’s hard to feel good about life when you’re constantly being hounded by creditors and working your fingers to the bone just to scrape by.
“Depression” here is a broad term, not a specific medical diagnosis. That said, there are certain characteristics of depression that will feel familiar to anyone who has been in this situation, including:
- Negative mood: You might feel anxious, apathetic, hopeless, or lose interest in things that you used to find pleasure in
- Difficulty sleeping: Insomnia, as well as constant sleepiness and fatigue
- Difficulty thinking: Struggling to concentrate or articulate oneself
- Physical changes: Sudden weight gain or weight loss is not uncommon
Suffering from depression is a serious medical concern; if you think you might be clinically depressed, regardless of the reason, seek professional help. Being in debt is rarely the only contributor to depression, but it doesn’t help.
One negative way that people cope with being in debt is through resentment. Feeling a lack of control in their financial and personal lives, people often begin to resent those around them, especially close friends and romantic partners. Perhaps an individual feels that a partner’s lifestyle encouraged spending outside one’s means, or that the partner brought too much debt into the relationship. Just as often, the stress of being in debt can easily make someone more combative.
This resentment can become more than just unpleasantness. As this New York Times article explores, resentment over debt and arguments over financial matters are often what break up relationships. These kinds of interpersonal difficulties don’t just make life harder; they can destabilize your situation, making it even harder to pay off your debt and get back on your feet.
Buyer’s remorse is a hard thing to deal with. You see something you want, get excited about it, whip out your wallet, and it’s yours. You’re scarcely to the car when you realize that you spent far too much on something you never really needed in the first place.
Now imagine that experience, multiplied many times over, compounding interest every month. That’s what the regret that stems from debt feels like.
On one hand, that regret comes from decisions made. Why buy those shoes? Why go out to all those dinners? Why buy that car? Why take out all those student loans without really understanding them? Even when the decisions were good or necessary, regret can creep in.
On the other hand, regret can come from lost opportunities. When you’re in debt, you are unable to do… well, much of anything. While everyone on social media seems like they’re on some beach sipping drinks during spring break, and you’re sitting on the couch watching TV, it’s hard not to regret certain decisions.
Fear stemming from indebtedness can be one of the most debilitating feelings of all. That fear can come from recurring short-term anxieties. What do I do if I can’t make my payments on time this month? I may have to choose which bill to pay!
Even worse are the long-term fears that stem from debt. I may never get out of debt. I could lose my job and become even less able to make my payments. Debt is going to prevent me from doing the things I always wanted to do.
In the worst cases, debt can lead to panic when you can’t see a way out. When panicked, we don’t make good decisions. This is when people in debt often start to dig deeper holes for themselves. “If I’ll never get out of debt anyway,” they say, “why worry?” So, they keep spending and refuse to make a plan to pay off their debts, which is obviously not a recipe for financial health.
The material effects of debt
Beyond the emotional trauma that comes with debt are the “smack you in the face” effects. The material impact of debt can set someone back years in her or her plans for the future.
Higher interest rates
Being in debt doesn’t mean you won’t want or won’t need to use more credit. Say you need to buy a new car, or you’re finally ready to buy a house. You’ll need a loan to do it.
When you have a lot of credit card debt, though, you’re much more likely to have bad credit. And, if you have bad credit, lenders will want to charge much higher interest rates for any loans offered to you. That means you’ll pay more over time for the exact same service. That’s assuming you get approval for a loan or other type of credit in the first place, as lenders are much more likely to reject an application from someone with bad credit.
Difficulty finding a residence
Increasingly, potential landlords perform a credit check for prospective tenants. They do this for a variety of reasons. Some may just be looking for proof that you’re responsible financially. Others may be checking for past evictions. Most are looking for both.
Regardless, your credit score will often play a role in your potential landlord’s decision, and your level of indebtedness will have a huge effect on that.
Denial of employment
Similarly, employers are increasingly likely to check your credit score before deciding to hire you. This is more common with positions that have some kind of financial aspect, but it can happen to anyone.
Like landlords, they’re checking your credit score for many of the same reasons. They want to see that you’re responsible, reliable, and stable before they decide to hire you.
In other words, your indebtedness can directly affect your ability to get a job, which in turn can affect your ability to pay off your debt. It’s a vicious cycle, but it happens.
Harassment from debt collectors
If you’re behind on your debt payments, this is probably all-too-familiar to you.
When you’re deep in debt, your creditors will try all sorts of methods to get you to pay up. Threatening letters are sure to arrive, but you can always just toss those aside. What many debtors fear the most are the harassing phone calls. You’re minding your own business when suddenly, your cell phone starts buzzing. It’s a call from an unknown number. You decide to take the call. Where’s the harm in that?
On the other end is a debt collector who knows your name, address, phone number, social security number, and the exact amount of the debt you owe. This person obviously has nothing nice to say; he or she is just trying to get you to agree to pay your debt.
You hang up, but the moment stays with you. Now, every call you get from an unknown number causes a rush of unpleasant anxiety, to the point where you avoid answering your phone whenever possible.
Despite all the other negative effects of debt that we already listed, for some people, this is often the worst one. It’s one thing to have to deal with debt when you’re trying to get a job or pay your bills, but it’s different when you face constant harassment because of it.
How does debt consolidation make paying off credit card debt stress-free?
We’ve taken a lot of time to sum up many of the emotional and material difficulties associated with significant credit card debt, but good news is here. How can debt consolidation reduce the stress of paying off credit card debt?
First, let’s go over what debt consolidation is, exactly.
With debt consolidation, you take all of your existing debts and consolidate them into a single manageable payment. In this context, we’re focusing a lot on credit card debt, although it’s common to consolidate other debts as well, such as student loan debt.
The pros of credit card debt consolidation are simple. By consolidating your debt into a single payment, you no longer have to deal with a bunch of different payments and due dates each month. Instead of bending over backwards financially to hit all of your deadlines, you only have to worry about making a payment once per month.
Past that, debt consolidation can often save you money in both the short and long term. In the short term, your single debt consolidation payment may be less than the sum total of your former separate debt payments. In the long term, your debt consolidation payment may have a much more forgiving interest rate than your former debts did. That means you’ll pay less over time when you consolidate your debt, and probably pay it off in less time than you would have otherwise.
With debt consolidation, you have a clear and manageable path to paying off the debts that used to terrorize you and rule your life.
Instead of being depressed by your prospects, resentful of those around you, regretful of your choices, and fearful for your future, you’ll be empowered to take control of your financial well-being and certain of how you’ll do it.
Additionally, as you improve your financial standing, you’ll likely improve your credit score as well. That makes you much more likely to pass a credit check from a potential landlord or employer, and it gives your debt collectors nothing to harass you about. It also makes you much more likely to qualify for a loan on a large purchase, such as a car or home.
If you’re interested in debt consolidation, you have plenty of options to consider. If you’re curious how National Debt Relief can help you to pay off your debt and take control of your life, we invite you to browse our website and learn more about what we do. Check out some great reviews from our past customers and contact us today.