How Crypto Can Help Pay Off Credit Card Debt – Hometown Station | KHTS FM 98.1 & AM 1220 – Santa Clarita Radio
Just a few years ago, mining cryptocurrencies was considered a hobby for computer freaks. But today, the crypto phenomenon has exploded into a modern day gold rush, capturing the interest of millions of people.
And while digital currencies are still in their infancy, they are invading many aspects of everyone’s life and finances. But is crypto’s potential far-reaching enough to solve one of Americans’ biggest financial problems? It certainly seems so – learn below how crypto can help you pay off your credit card debt.
Crypto and your credit card debt: an overview
With an average outstanding balance of $5,525, credit card holders in the US often find their household finances spiraling out of control with their credit card debt. At the same time, your credit card balance should not determine your financial stability.
From debt consolidation to adopting healthier spending habits, there are many ways to reduce credit card debt or the financial stress that comes with it.
And thanks to emerging technologies like DeFi and digital currencies, there are new alternatives worth considering today.
Decentralized and based on blockchain technologies, cryptocurrencies enable fast and secure financial transactions. While the world of cryptos initially seemed accessible to only a few experts, today’s trading platforms are making the benefits of digital currencies accessible to everyone.
In the case of Santa Clarita, proof of the potential of cryptos is just around the corner. What was the U.S. city with the second-highest debt ratios in the country in 2019 is the one with the highest debt repayments in 2021. And it’s thanks to crypto!
Crypto-Backed Debt Consolidation Loans
As more mainstream investors become interested in crypto, digital currencies are becoming easier to trade, buy, and use – and they’re transforming the entire financial industry. In turn, more institutions and retailers have started accepting this digital asset as payment or collateral, in a way not vastly different from using cash.
In the case of credit card debt, owning cryptocurrencies like bitcoin or ether can help you secure a loan that can be used to consolidate your debt or pay off your outstanding balance.
With crypto-backed lending, your assets are treated as collateral for the money you borrow, meaning you could potentially lose your principal if you can’t keep up with the repayments.
However, crypto lending offers significant advantages, including:
- High credit limits of up to 50% to 90% of the value of your digital assets
- Availability of funds within hours
- Low interest rates
- No or limited credit checks
- Large selection of repayment terms
Credit cards with cashback functions for cryptocurrencies
It’s always important to choose your credit card wisely in order to manage the financial burden of credit card debt. However, this is especially true if you plan to capitalize on crypto debt-repayment opportunities — today or in the future.
In that case, choosing a credit card with crypto rewards features is a viable option to make money while you spend. If you choose cards that offer crypto cashback features, such as B. the SoFi credit card, you may also be able to earn points that can be redeemed as fractions of bitcoin or ether.
In turn, with the right investment strategy, they can help you expand your portfolio, build additional revenue streams, and pay off your credit card debt.
Use your crypto portfolio to pay off credit card debt
In 2018, nearly 20% of Bitcoin investors surveyed bought their digital assets using their credit cards, increasing their debt. At the same time, the majority of them planned to redeem their balances in the future thanks to the capital gains from the sale of their assets.
And if you invested back then, you may have noticed that your wealth has increased in value by more than seven times. In that case, you might consider using a fraction of your capital gains to pay off your credit card debt.
Due to the high level of risk and volatility of digital assets, investing in cryptos is not for everyone.
However, if you have been interested in the untapped potential of digital currencies for a while and have made all the necessary considerations, using crypto to pay off your credit card debt can be a good alternative. However, make sure you always work with an experienced financial advisor and find a reputable credit card provider.