20 Dreams that Credit Card Payments Hold You Back from Achieving

1. Your dream home

Whether it’s buying a first home, upgrading to a new home or renovating your existing home, credit card payments are keeping you from that perfect space that you’ve always dreamed of.

• For Millennials 25-34, homeownership rates are down by eight percentage points versus Gen X and Baby Boomers at the same time in their life.^[2]
• Even Gen Xers are having a hard time getting back into homeownership after many were forced to sell and start renting after the housing market collapsed in 2008.^[3]

If you already own, the money you’re using on credit card payments could be much better served on your home. You could take out a home equity loan or do a cash-out refinance on your mortgage to fund a renovation.

2. Getting married

Weddings are expensive. The average wedding costs $33,391 these days. It's no wonder that people are putting off getting married in favor of cohabitating. Many couples say that they're putting off the wedding until they can afford to do it the way they want. But if you're paying one or more creditors every month, that's a month you could be saving up for your nuptials.

3. Kids

Another major life goal that people are putting off because they can’t afford it is kids. Millennials say they can’t afford kids because they can barely afford to pay for everything themselves.^[4] An increasing number of women are waiting into their 30s to have children. In fact, the average age to have a first child is now 28.^[5]

And for the record, if you already have kids, then your credit card debt is probably holding you back from spoiling them as much as you want.

4. Retirement

It’s now an age-old question – do you save for retirement or pay off credit card debt?

A recent survey found that 30% of people will cut back the money they save for retirement when money gets tight.^[6] And many people believe that you can’t start saving for retirement until you are debt free. It’s no wonder that more than half of 60-somethings may have to delay retirement.^[7]

Whether you’re putting off saving or putting off retiring, those credit card payments aren’t making it any easier to achieve your retirement goals.

5. Taking vacations (or taking better vacations)

The average cost of a vacation is $1,145 per person.^[8] And a 2017 LearnVest survey found that only about a quarter of people manage to take a vacation without taking on credit card debt to do it. If your balances are already high, you may be in a position where you’re forced to staycation just to use your vacation days.

If you didn’t have those credit card payments, just think of where you could go. Even international travel would be affordable if you could save that money that you’re currently spending on credit cards every month.

6. Saving for your kids’ college fund

About 40% of parents are saving money to send their kids to college.^[9] No college fund leads to more debt – either with a PLUS loan you take out to fund their education or with loans they take out themselves. This is creating a generational cycle of debt. You can’t afford to help them pay for school, so they take out debt. Then they have debt and have to delay their own life goals.

7. Going back to school yourself

Carrying credit card balances keeps you from going back to school for two reasons:

1. If you’re taking out private student loans, high levels of credit card debt can make it tough to get approved.
2. If you’re making payments on multiple credit cards, it makes it harder to potentially scale back your work hours, so you can focus on school.

Getting a higher education can give you a better career path and a higher lifetime earning potential. But how can you get there when your credit card debt is holding you back?

8. Changing careers

Even if you don’t want to go back to school to change your career path, your credit card debt could be stopping you from switching careers. You may not have the money to move to a place where you could get a better job. Or, you might not be able to switch jobs because your life’s passion may not pay the bills as much as your current nine to five.

When you change careers, you really want to have a padding of savings to fall back on in case things don’t go as you plan. So, all that credit card debt may be making it impossible to get pursue your true calling.

9. Helping kids, family, and friends

For Gen Xers and boomers, your adult millennial children could probably use some help getting ahead financially. Millennials are lagging behind in major life goals, including No. 1 and No. 2 on our list. As a parent, you could be helping them pay for a wedding or get the down payment they need on their first home.

Even if you don’t have kids who need help, you may have other family and friends that could use a little help or a loan. But if you’re spending every dollar you earn on credit card bills, you don’t have any money left to help out others.

10. Saving the world

Charitable donations are a discretionary expense, meaning they’re not a necessity. That means they’re one of the first things you cut when you need more money to cover high credit card payments. You may find yourself cutting recurring donations completely and turning down the organizations that you used to donate to every time they call asking for funds.

Imagine all the good you could do if you weren’t using hundreds of dollars on credit card bills every month. You might even be able to donate enough to get a nice tax break for your charity.

11. Protecting your family’s future

Life insurance is one of the most overlooked financial tools around. If you die or are permanently disabled, your family will need life insurance to get through a tough transition period. Without life insurance, your funeral costs will just be another thing that ends up on your surviving family’s credit cards.

If you weren’t making payments to credit card companies every month, you could afford to get life insurance to protect your family long-term.

12. All those repairs that your house / car / you need

People put off regular maintenance and major repairs for as long as possible when they're paying down credit card debt. If you can just wait a few more months before you get that checkup or take your car in for new tires, everything will be fine. But many times people keep putting these things off until there ends up being a serious problem

• 54% of Americans have delayed care for themselves in the past year because of costs and 23% delayed for more than a year.^[10]
• In 2017, a AAA study found 64% of drivers can't pay for a car repair without going into debt to cover the cost.^[11]

How many maintenance checks and major repairs have you put off in the past six months? How many doctor’s appointments or big purchases for your house have you delayed? If the answer is any, then that’s already one too many things you’re putting off because of credit cards.

13. Starting a business

You may be ready to break out on your own if you have an idea for a great company or small business. However, 82% of small businesses fail because of cash flow issues; about 79% said they started out with too little money.^[12]

According to the Small Business Administration, you can open micro-businesses for less than $3,000 and many home-based franchises only cost between $1,000 and $5,000.^[13] That may not seem like a lot of money, but if you’re paying off multiple credit cards, it may be a struggle to get to the starting capital you need.

Even if you’re not struggling to generate startup capital because you may have investors or partners, starting a small business still requires a financial safety net. That way, you can maintain financial stability while your company is gearing up to generate revenue.

14. Buying the latest and greatest tech

If you’re still sitting on the iPhone 8 while salivating over your coworker’s XS, then you may have credit card debt that’s holding you back. Upgrading to the latest tech is not just a status symbol, it’s about getting features that make your life easier and more convenient.

If you can’t afford to pay for a new device outright or add the payments onto your wireless bill, then you may be stuck with an older model. And if you’ve put purchasing a newer phone or tablet off for a few years now, then you may be facing compatibility issues. If you didn’t have credit card debt, you could probably afford to upgrade.

15. Adopting a new pet

Pets are expensive. The average pet owner spends more than $1,500 per year on one pet. You could basically end up spending $125 every month just on food and basic care for a pet. That’s no small amount of money to add to your budget. So, as much as you may want a new fur baby, you may be putting it off if you have credit card debt.

Even with a total balance of $5,000, the minimum payment requirements on most credit cards would be over $125. That means that while your credit cards may not be huge causing problems, they could be keeping you from adopting a new furry friend.

16. A new car / boat / big-kid toy

The average cost of a new car is $37,577, according to Kelly Blue Book.^[13] Boats are just as expensive. And, depending on where you live, you may also have your eye on ATVs, jet skis, motorcycles, dirt bikes or three-wheelers.

Buying the latest and greatest big toys will be a lot of fun for you, your family and your friends. You could be having some great weekend excursions, except your credit card debt is getting in the way of making a major splurge purchase without taking on extra debt to do it.

17. Updating your wardrobe

Staying on-trend every season is impossible when debt holds you back. Even just making sure your clothes aren’t looking a little worse for the wear is hard when you have debt. There are probably at least one or two pieces in your closet that you wish you could replace. But if you’re already sitting with balances on your credit cards, you may have the funds to keep your wardrobe fresh. Getting rid of those balances would free up money for a seasonal clothes budget.

18. Going out more

If you’re having major FOMO (fear of missing out) at every turn, you may want to look at your credit card balances. Just paying for cocktails on a night out is pricey – if you live in a metropolitan hotspot, you could be paying upwards of $15 per drink. One night out could easily drain $100 or more from your bank account, and that’s just if you’re paying for yourself.

If you didn’t have those credit card payments, you could be going out more, hitting up concerts in the good seats, and saying yes to all the invites you get from your friends. No more credit card debt, no more FOMO.

19. Paying off your student loans

More than 44 million Americans have student loans to repay. If you’re one of them, then having credit card balances to repay as well isn’t making your job any easier. Multiple credit card balances mean multiple extra bills to cover each month. If you could nix those bills, then you could increase your student loan payments or make extra payments.

Getting out of your student loan debt will make it easier to accomplish other goals, like purchasing a first home or getting a new car. The first step to becoming truly debt free often lies in getting rid of your credit card debt.

20. Improving your credit score

Aiming to get a FICO score over 800? Your credit card balances aren’t making that any easier. Credit utilization accounts for 30% of most credit score calculations. That’s the measure of how much debt you owe versus your total available credit limit. Anything higher than 30% is bad for your credit score. If your total available credit limit is $15,000 and you owe $5,000, then you’re damaging your score with the amount of debt that you have.

Even if you’re under 30% credit utilization, lower is always better. That means paying off your balances in full and keeping them paid off is the best way to aim for excellent credit.