1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair
2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% -
3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.
Struggling with a pile of unpaid debt
Maybe you started a business a few years ago and needed to use your credit cards to get it going. Maybe you bought a new house recently and maxed out your credit cards decorating it. Or maybe you’re just bad with money and haven’t been able to get a grip on your debt. Whatever the case may be, there are millions of Americans carrying around way more debt than they should. It can force them to make drastic lifestyle changes and stop living the way they want to live.
It can cause them to be stressed out all the time or frustrated with their financial situation. Worst of all, it can force many people to the brink of sanity and make them stop pursuing their dreams. If you’re one of these people, you don’t need to stop trying. Even if you’re carrying around as much as $100,000, there are ways to pay your debt down without declaring bankruptcy. You just need a little help. And help may be just a phone call away.
Why Americans suffer from debt
It’s not hard to understand why so many Americans are in debt today. As this video clip from 2007 reveals, this country has been struggling with debt for years now.
Video: A Nation in Debt - A Ticking Time Bomb
How to cure your problems with debt
Debt can be a scary thing. But it’s important for you to know that there are options if you wish to eliminate your debt. Whether you owe just a couple hundred dollars or $100,000, debt consolidation is a great way to get out of debt quickly. So, how does debt consolidation work? Well, first you’ll need to find a lender willing to help you with your specific situation. This lender will then essentially help you pay off any high-interest credit cards you have as well as other debt you owe to creditors. Then, the lender will work with you to set up a payment plan for your total debt.
Why debt settlement may be another good option
While debt consolidation is a great option for paying down your debt, it’s also just one option available to you. Debt settlement is another way to eliminate debt quickly and, in some cases, can actually be better than consolidation. If you have a sufficient amount of money in your bank account but can’t seem to get rid of your debt, debt settlement allows you to negotiate with your creditor. Many creditors want to make sure they make something off your debt. Therefore, they will accept a fraction of your debt in one lump sum and, in return, eliminate the rest of the debt. This way, they make money—and you lose your debt. On $100,000 worth of debt, they may be willing to accept as little as 20 to 25 percent. But you need to act quickly and stay in constant communication with your creditors in order to use this option. Fill out the form above to learn exactly how this option works and what it could do for you.
Using bankruptcy as a final option
Many people in debt feel that bankruptcy is their only option. In reality, it is an option—but it should only be used as a last resort. Bankruptcy can harm your credit report and credit score for up to a decade and disallow you from borrowing money in the future. Additionally, bankruptcy could force you to give back some of your physical possessions. It also does not put you in the clear necessarily. You could be forced to repay certain debts over the course of the next few years. So it could be worth exploring debt consolidation or debt settlement first.
Why bankruptcy doesn’t always burn you
Bankruptcy should only be used as a last resort. But it can offer many Americans a second chance when it is used properly.
Video: The Truth About Bankruptcy
Steering clear of debt in the future
Regardless of whether you choose debt consolidation, debt settlement or bankruptcy, remember this: Debt is something you’ll always be fighting against. Buying a house involves debt. Buying a car involves debt. Even buying a new outfit or just going out to eat can involve debt. Use the following tips to avoid repeating your mistakes once you’ve attacked your debt and gotten rid of it once and for all.
Budget your money properly: Know how much money you make every month and how much you can spend on housing, food, clothing and entertainment. You need to account for everything and stop using credit to purchase items every month.
Pay off debt as quickly as possible: If you do use credit, work on paying off your debt promptly. Don’t let it grow and become unmanageable.
Look for one reliable credit card: Don’t apply for multiple cards and use every single one. Rather, find a card with a low interest rate that suits you.
Rebuild your credit: Debt consolidation, debt settlement and especially bankruptcy can harm your credit score in varying degrees. Once you pay off your debt, continue to pay bills promptly every month to avoid harming your credit further.
Learn from your past mistakes: Many people have a tendency to pay off debt and then repeat the moves that landed them in debt in the first place. Take a cue from the past and find out what forced you into debt in the first place. Then work hard to make sure it doesn’t happen again.