Credit Card Debt is a lot easier to get out of than you might think
The average college senior has nearly $3300 in credit card debt, according to student loan provider Nellie May. Another study found that 30% of American workers had more debt than funds in their retirement accounts, which includes 1/5 of high-income workers as well! Perhaps this is why credit card debt reduction has become a $7 billion/year industry. While these services help by offering short-term relief, long-term help requires a new way of thinking about finances.
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Often, you can get rid of credit card debt through credit card debt reduction services. If you’re not disciplined enough to stick to a budget, then keep track of your bills and adhere to a repayment schedule with your creditors, as you will need a credit card reduction company’s help. Many of these companies, such as Consumer Credit Counseling Services, are non-profit organizations with low fees. However, beware of companies requesting giant upfront fees, and who claim they can repair your credit overnight and who aren’t listed with the Better Business Bureau. You may be able to find reputable companies in your area through universities, military bases, credit unions, housing authorities, banks and branches of the U.S. Cooperative Extension Service. Educational workshops are a great way to minimize bad credit debt and create a solid plan for the future.
To keep out of credit card debt, you should first only take advantage of offers you actually need. There is no reason to ever have more than 2 or 3 credit cards. Having an unsecured credit card you never use is worse than just buying one thing per month and paying it off each month. To build your credit wisely, you may want to use a secured credit card, where you pay the bank your credit limit upfront and then only take out what you have put in, which is sort of like a debit card, only this one gets reported to all three credit bureaus to show your progress. Speaking of debit, use your credit card as you would a debit card, subtracting each purchase from your savings to be sure you’re not overspending. Ideally, you’ll want to pay on time and in full because only paying off the minimum balances can take years to pay off the full amount, given the interest. Be sure you don’t max out your credit cards as well. If you’re using over 30% of your available credit limit, then your credit scores will go lower.
Rather than go through credit restoration services, you may want to attack your credit report on your own. You can order a free copy of your credit report from all 3 of the major credit bureaus, which are TransUnion, Equifax and Experian, at www.annualcreditreport.com, which should show all your late payments, collections accounts, loans and outstanding debts from the past 7-10 years. You can dispute some of the credit card debt or notations for free, which could boost your low credit score. You may click a few buttons online or mail in updated records to the credit bureaus or you may want to call your creditors directly and ask them to remove outdated information for you. This sometimes works for inaccurate information, but it’s not a guarantee. Usually, when you mess up on your payments, you have to take a hit for at least 1-2 years. The good news is that your payment history from the past 48 months counts the most, so you can repair your credit by turning over a new leaf and borrowing more responsibly.
Do you know a nasty four letter word that most adults face every single day? No, it is not a curse word though to be honest…it feels that way. It is debt. This four letter word is responsible for people feeling as if they will never be free from the shackles of credit card bills and loan payments. You do not have to live your life around that four letter word. You can be free and be rid of the bills and credit card payments.
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