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Getting Out of Debt

Getting out of debt is always a great idea but for some of us, those of us that live paycheck to paycheck, an impossibility. Overwhelming debt can have a negative impact on almost every facet of our lives. It can ruin marriages and relationships, keep us from obtaining certain jobs, increase the cost of our car insurance and other needed services and mostly, just make our day to day lives miserable.

Interest Rates: Unless you have the extra income to actually tackle your debt and start reducing it, you will be, unfortunately, stuck in a vicious cycle of making minimum payments that have an extremely small impact on the principal amount you owe. If your current credit card rates exceed 10%, you are considered somewhat of a risk by your creditors and therefore the high rates. The reality is, all too often your zip code determines your interest rate, not your payment history. You can have a stellar payment history that may exceed 5 years of never being late but your creditors have determined by virtue of where you live, you are a risk and this in itself is truly unfair.

Monthly Payments: By design, creditors want you to maintain a schedule of minimum payments and do so by selling price (small monthly payments). This translates to you being on “the hook,” with them for a very long period, only making minimum payments and incurring a great deal of interest expense. So over time this debt monster sneaks up on you as you accumulate more and more credit cards and ultimately more and more debt. When you started out, you may have had one or two credit cards with small minimum payments but as time went by you ended up with five to eight credit cards and now those minimum payments have taken over your life.

Credit Scores: A high Credit Score, something that we covet so very much and justifiably so as it allows us to obtain credit and purchase those items we want. The problem with this scenario is, your high credit score comes with a downside. As a rule, creditors make it a point to pursue high credit score individuals with offers that are often too good to pass on. Such as 0% interest for year one. Unless you have a law degree or able to decipher the fine print of the original agreement you signed with your creditor, you may be in for a very big surprise at the end of year one. Yes, having a high credit score is a good thing but be careful as it can lead you towards a situation where you are suddenly dealing with a lot more debt than you can handle.

So you can see, having credit cards or a credit line can be beneficial to you, if not handled with care, it can all turn around on you and become your worst nightmare. From the moment you signed the application for credit, everything was set up to be in favor of your creditor, not you.

There are solutions available to you as it relates to your unsecured debt and that is why you owe it yourself to take a moment of your time and contact us. We will analyze your situation and propose a plan that is specific to your needs, not your creditors needs.