Dealing with the stress of too much debt is a Killer! Here are some tips on how you can manage and ultimately eliminate the stress of debt:
Of course, there are several forms of debt, but for this blog, I'm basically talking about
UNSECURED DEBT such as:
- Credit Cards (Visa, Master Card, Discover, American Express, etc.)
- Store Cards (Kohls, Home Depot, Sears, Amazon, Chevron, etc.)
- Medical Bills not covered by insurance
- Private Student Loans (now there is help for your Federal Student Loan)
- Personal Bank Loans
- Payday Loans
When you get to the point where you can barely keep up with the minimum payments due, the stress level really starts to go up!
Many people make some short-term decisions that usually do not help, but actually causes more problems and stress in the future.
Here's a few to avoid if at all possible:
Using a cash advance from one credit card to make the minimum payment on another card.
Although you may have a decent interest rate on your credit card for normal purchases, when you use the CASH ADVANCE feature, the rate is much, much higher!
And some credit cards will apply future payments to the normal purchases with the lower interest rate and that causes the cash advance's balance with the higher interest rate to increase faster!
The "easy" access with "no credit check" of the PAYDAY LOAN is a scam that, in my opinion, is nothing short of the "LOAN SHARK" of the past!
As director of settlement services here at Debt Releif NW, LLC for the last 15 years, I've seen clients with interest rates on these type of loans as high as 70% or more!
If you've been caught in this trap, you should contact a reputable Debt Management Company TODAY!
Don't... "Hide your Head in the Sand"
Once you miss a payment on your credit card or other unsecured loan, a lot of negative things start to happen:
1. You will be charged a "late fee" for failure to may a payment due date. This fee is usually around $35 or higher!
If you've missed a payment (or 2 or 3) and then made the minimum payment your statement demanded, you may be shocked to see what happened!
Let's say the minimum payment due last month was $45 on your credit card account, but you just couldn't afford it.
This month, your statement says that you owe another $45 minimum payment PLUS last month's missed payment of $45, PLUS a late fee of $35, PLUS the interest rate due (more about this in a minute).
If your balance is around $2,000 and your annual interest rate is 12% (and it might have gone up now that you missed a payment...read the fine print on your statement) that's another $20!
Let's add up what's due now:
- Missed minimum payment $45
- Interest due $20
- Current minimum payment due $45
- Interest for this month $20
- Late fee $35
Total due $165
You can't ignore the problem or it just will compound!!!
If you continue to miss payments, ultimately the account will be charged off and turned over to a DEBT COLLECTOR, which is another whole set of STRESS!!!
OK, so now you know what NOT TO DO... WHAT CAN YOU DO?
Fortunately, you have several options such as:
- Debt Management
- Debt Settlement
- or even Bankruptcy Protection