Credit cards can act as a lifeline during lean financial times. An unexpected period of unemployment, a move to a new city, a medical crisis — life happens. But credit cards also entice people to live outside their means without realizing the long-term consequences of their spending.
Many credit card holders mistakenly think they’ll be OK making minimum monthly payments, only to one day realize they’re on the hook for thousands of dollars in interest. Instead of remaining stuck in the revolving door of credit debt, consider taking out an alternative loan to pay off those debts and get back on firm financial footing.
Here are the three most compelling reasons we know to drop your credit card debt as soon as possible.
1. Large balances hurt your credit
Using credit cards for small purchases each month and paying them off right away can boost your credit score because it proves you can manage debt, but large balances do the opposite.
Lenders use your debt-to-income ratio to determine whether you are financially stable enough to take on new loans or credit lines. If you’re using more than 30 percent of your available credit and paying only the minimum payments, you appear as a risky borrower and chances of approval drop significantly.
Taking a loan to pay off high credit card balances is one way to regain financial control and improve your score. By paying off your high interest debt with a low interest monthly payment loan, you will be back to building positive credit and saving hundreds of dollars in interest, which leads us to number 2… ...continue reading
Was holiday gift giving a disaster last year? Did your Christmas giving go way over what you initially budgeted? Maybe it was as simple as looking in the eyes of your adorable kids and your loving spouse and you just couldn’t say “no."
Months later you’re still dealing with the aftermath of your Christmas giving and by the time you finished paying off Christmas 2014, Christmas 2015 is just around the corner.
Avoid Christmas debt
Every time you look at your credit card statement you see that you’re still paying off your daughter’s Tickle Me Elmo. The question now becomes how do you manage your 2015 gift giving so that it doesn’t linger into 2016?
You have to actively manage your family’s holiday expectations. There are a number of ways to do this without killing the holiday spirit. How to do this? Here are three pain-free ways to manage your family’s holiday expectations: ...continue reading
Where has the year gone? Christmas is approaching faster than you think, and have you begun your holiday planning yet? Are you freaking out? Don’t, there is still enough time to plan a debt free and joyous holiday season.
Here are five steps to for the last minute holiday planner who doesn’t want to go broke and be in debt.
Create a plan
Take time to create a plan for the holiday season to avoid debt. Do you want to have a big blow out party? Or a cozy gathering of friends? Would you like to give gifts to a large number of people or a small group of friends?
Taking time to plan helps to create clarity and a framework for upcoming holiday gift giving and festivities.
Set a budget
Spend time thinking about what you can afford, set your budget and stick to it. Setting a budget makes it clear to you what you can and cannot afford.
Once you set your initial budget cut it by 25 percent just because you can and maybe should. ...continue reading