From Yahoo Finance: 2025-06-12 08:02:00

Credit card debt prevents many Americans from reaching financial goals due to high interest rates. The average credit card debt per American is $6,455, according to TransUnion. Personal loans can be a solution to tackling high-interest debt and achieving debt freedom.

Credit cards have an average interest rate of 21.37%, while loans have an average rate of 11.66%. This significant difference makes personal loans a viable option for reducing interest payments for Americans with a credit score of at least 670.

Lowering interest rates on credit card debt is crucial to lowering monthly payments and securing debt freedom. Personal loans can provide relief for those struggling with minimum payments, offering a known payoff date and potential for lower payments.

Consolidating multiple credit cards into one personal loan can simplify debt repayment by providing a single payment date and set interest rate. This strategy allows individuals to focus all efforts on repaying the debt and getting ahead financially.

Reducing credit card debt improves credit scores by decreasing credit utilization ratios. While shifting debt to a personal loan, consistent payments combined with reduced utilization ratios can boost credit scores relatively quickly.

A personal loan can alleviate the mental stress caused by high-interest credit card debt. Having a set payoff date and saving on interest can provide psychological motivation to continue working towards debt freedom and breaking the cycle of credit card debt.

Read more: 5 Reasons a Personal Loan Is the Right Choice To Tackle Your High-Interest Debt