Credit cards often look like a fast and simple way to pay for sudden expenses and to help you enjoy the things you love in life. They are also one of the most toxic things you can have in your wallet. When looking at your overall debt load, the number one debt that experts suggest getting rid of is your credit cards. Why is that? Let’s find out.

Interest Rates = Paying Twice for Your Purchases

Unless you pay the full balance on your credit card every single month, you are always paying for the privilege of using your own money. With interest rates starting at 9% and climbing into the twenties, it is like leaving a really good tip for the bank every single month while they do nothing more than send you a bill. That 10% keeps accruing, and before you know it, you will have paid twice over for the new set of clubs, your kid’s dance lessons, and even your tank of gas.

Designed to Keep You In Debt

Well, maybe you aren’t actually using the credit card anymore and are paying the minimum every month. It sounds like a plan, but that minimum payment is designed to keep you in debt. Did you know that if you just send in a 2% payment of the entire balance, the interest will keep building, and in the end it can take up to 30 years to clear what was a modest purchase.

This is why carrying a balance on your credit card can cause you to lose points on your credit score. Overtime, it continues to knock more points off while you are not even adding to its balance. It is better to make a plan to pay off your credit card as soon as possible.

A Personal Loan May Be the Better Choice

Emergencies do happen and you might be looking at a large repair bill for your car or the need to replace a broken appliance. Applying for a personal loan is a better way to avoid the giant sucking void of credit card debt. You are approved for the exact amount of the purchase and are given a limited time to repay the debt, usually two or three years, with even payments made each month. Your debt is cleared in a reasonable time while you are able to handle the emergency.

Saving Up for Something Special is Best

Of course, the best option is to have an emergency fund in place. Set up a savings account and have a certain amount direct deposited into the account every month. Allow the account to grow without using the cash. When you need a new set of tires, visit the emergency room, or want to splurge on that new smartphone, you have the money available without increasing your debt.

Do you have a sudden expense and don’t want to add to your credit card balance? Check out a personal loan calculator to see how much money you can receive along with a projected payment plan that works with your budget.