If you're uncomfortable about the amount of debt you're shouldering, you're not alone. Only 23% of Americans report carrying no debt, according to Northwest Mutual's 2018 Planning and Progress study. And among those with debt, the average personal debt load (excluding mortgages) was a whopping $38,000.

Fortunately, you can succeed in paying off a lot of debt. Here are six compelling reasons why you should make crushing your high-interest debt a priority.

A man in a suit is shackled to a huge black ball that's bigger than he is.

Image source: Getty Images.

No. 1: It's hard to reach financial goals

Here's a big reason why you need to pay off your debt -- at least your high-interest-rate debt -- pronto: Carrying a lot of debt can make your financial goals unattainable, ultimately crushing your dreams. If you want to amass a substantial retirement war chest, put your kids through college, or save for a down payment on a home, it can be hard or even impossible while making payments on all the money you owe.

Here's just one example: Imagine that, through a lot of hard work, you're saving $500 per month and using it to pay off debts. That kind of money -- $6,000 per year -- could be growing for you instead if you weren't in debt. If it were invested and averaged 8% annually over 25 years, it would end up worth about $473,000!

No. 2: You can enjoy a higher credit score

It's underappreciated by many people just how important their credit score is. But that three-digit number can make a big difference in your financial life -- such as when you want to take out a mortgage.

Check out the table below, which shows what kind of difference a high credit score can make. It reflects recent interest rates for someone borrowing $200,000 via a 30-year fixed-rate mortgage and shows that there's a whopping $66,722 difference in total interest paid for the interest rates offered to those with the highest credit scores and those with the lowest ones.

FICO Score


Monthly Payment

Total Interest Paid

























Source: MyFICO.com, as of July 9, 2019. APR = annual percentage rate.

So what does that have to do with your debt load? Well, how much you owe is one component of a typical FICO credit score, and it's the second-most-important one, having about a 30% influence on the score.

For a good or great credit score, aim to have a credit utilization ratio (your total debt divided by the sum of all your credit limits) of only about 10% to 30%. Lenders don't want you to have maxed out your credit limits or even to come close. (Getting your credit limits increased can also improve the ratio. Sometimes, you just have to ask your card issuer for an increase in order to get one.)

No. 3: Debt costs much more than you realize

When you send off payments toward the debt you owe, it's easy to assume that most or all of it is reducing your balance owed. But a sizable chunk of it is just going toward interest.

Imagine that you owe $20,000 on your credit card(s) and you're being charged a 25% interest rate. If your minimum payments are 3% of your balance, you'll start out paying a whopping $600 per month, meaning you'll have to come up with $150 per week. If you can't pay that, your balance will be growing, digging you deeper into debt.

What if you do make that $600 payment and all future 3% payments? Well, according to one online calculator, it will take more than 30 years to pay off the debt and your total payments will exceed $63,000 -- all for a $20,000 balance owed.

Credit card debt is typically the costliest debt we carry -- often because of the dreaded "penalty APR" feature that many cards have. A penalty APR jacks your interest rate up high -- to as much as 25% or even 30% -- if you pay just a single bill late or commit some other infraction.

If you're carrying $20,000 in debt and are being charged 25% on it, you're facing $5,000 per year in interest costs alone! It can be hard to pay off your balance in such a situation -- or make any financial progress. (Some credit cards don't have penalty APRs, so always favor those that don't when card shopping.)

A piggy bank is shown, half submerged in water and with an unhappy expression.

Image source: Getty Images.

No. 4: You don't want to enter retirement laden with debt

Many people aim to enter retirement without a mortgage. That's a reasonable goal, and one you might attain if you pay your debts off in the coming year or years. Retirement can be financially challenging enough -- if you can wipe out your debts and pay off your mortgage, you'll have fewer things to worry about and be able to spend more of that fixed income on things like food, travel, and entertainment (and healthcare, insurance, taxes, and things like that.)

No. 5: Little or no debt can mean less stress and better health

Here's another excellent reason to pay off your debt ASAP: It can make you more relaxed and happy.

It's probably obvious that carrying a lot of credit card debt can be stressful, especially if you're being charged high interest rates. But other kinds of debt also take a toll. More than 7 million Americans were late making payments on their car loans as of the end of 2018 per the New York Federal Reserve, and a survey commissioned by Fair.com found auto loans caused significant stress and anxiety, with 36% reporting that having a car loan is more stressful than looking for a new job and 22% saying car debt has had a negative effect on their mental or emotional health.

Overall, 33% of workers have found paying off debt to be a cause of stress in their lives, per a 2018 Fidelity Investments survey, and a Student Loan Hero survey found millennials citing debt as their top source of financial stress. Debt has been linked to anxiety, depression, and panic attacks and it's often a top subject that couples argue about. Pay off your debt and you'll have a heck of a lot less to worry about.

No. 6: You'll be richer!

Finally, this is perhaps obvious but it's important and a powerful motivator: Once you pay off your debt -- at least your non-mortgage debt -- you'll have more money. You will no longer be spending those dollars each month for your car loan, student loans, and credit card debts. Instead, they'll stay with you -- and can be socked away in savings and investments to help you reach various goals.

The sooner you pay off your debts, the better -- and for lots of reasons.