Between mortgages, loans, and credit cards the average American has around $105,056 in debt, including $6,730 in credit card debt, according to recent Experian data. When you know you have big, outstanding debt, you might be tempted to use your savings to pay off what you owe.
In most cases, using your savings to cover outstanding debt isn’t a good idea. While it is important to pay down your debt and make regular payments, maintaining some sort of savings is crucial for financial security.
Draining your savings is a dangerous habit that can impact your savings goals, livelihood, and credit. Here’s everything you should think about before using your savings to pay off your debt.
