✌️ 2 big reasons to prioritize paying off your debt

Saturday,
May 20, 2023

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The week in review

• Treasury Secretary Janet Yellen stated the Biden administration and congressional Republicans are making progress in their negotiations over federal spending and raising the debt limit President Biden is expected to host congressional leaders on Tuesday to continue discussions.

• Retail sales in the US saw a 0.4% month-over-month increase in April, following two-consecutive declines in February and March. The figure was still well below forecasts of a 0.8% rise. Excluding automobiles, gasoline, building materials, and food services — often referred to as core retail sales — the increase was 0.7%.

• Building permits in the US declined by 1.5% to 1.42 million in April. This marked the second-consecutive monthly decline, suggesting housing demand remains under pressure from higher interest rates.

For more economic news, visit On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Here are 2 big reasons to prioritize paying off your debt.

In theory, getting out of debt would always be a priority. After all, debt = stress, financially as well as emotionally. But now with interest rates on the rise it’s even more important to get out of debt ASAP. Here’s why:

• You’ll owe more. If you have variable-rate debt (e.g. credit cards or certain types of loans or credit lines), higher rates mean that you’ll owe more over time — and nobody wants more debt!

• Debt affects your credit. Credit bureaus consider how much you owe in relation to how much you earn — i.e. your debt-to-income ratio. By paying down debt, you spruce up that score.

To protect yourself, be proactive. Consider consolidating your debt using a personal loan. It could lower your total interest rate and help you focus on the main idea: enjoying a debt-free life.

This week’s top stories

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The IRS is preparing to test a free, government-run e-filing system next year.
That could mean many different things, depending on who you ask. See what the supporters and critics of the new program are saying, and how it could impact you.
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Deep dives from SoFi Learn

Are you guilty of keeping your credit card statements forever? Here’s when, and how you can clear the clutter.
Yes, it can be useful to have these on hand for record keeping and to check for errors, but knowing when you can let go can help you clear your mind, and your filing system.
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If you’re saddled with credit card debt, you’re not alone. The average US household owes $6,270 in credit card debt.
We’ll break down ways to potentially get out—and stay out—of credit card debt.
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Combining your debts into a new, single loan can be a smart way to lessen debt, giving your brain and your budget some breathing room.
We’ll take a look at what it means to consolidate debt and how it works.
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