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Are you frustrated with debt? Over 40 million Americans live under the daily stress of being heavily in debt. A recent survey revealed that over half of all Americans have at least one credit card that they do not pay off in full each month and essentially using the credit card for a short term loan. The average American household has over $8,000 in credit card debt alone. With an annual percentage rate of 18%, you will be charged over $11,000 in interest and it will take over 25 years to pay it off by choosing to make only the minimum payments.
If you or someone you know is overwhelmed with debt, these options should be considered: credit counseling from a reputable organization, debt consolidation, debt negotiation or bankruptcy. Bankruptcy should be a very last resort. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.
If you are experiencing or facing overwhelming debt you need H.E.L.P.
- How to Avoid Bankruptcy.
- Eliminate Credit Card Debt.
- Learn Smart Money Management.
- Protect Yourself and Your Assets.
"H" stands for How to Avoid Bankruptcy. Bankruptcy should be the very last resort. First thing that anyone with overwhelming debt should do is to figure out how they got in this financial crisis. If you don't deal with the behavior that got you there in the first place, you're not solving the problem.
"E" stands for Eliminate Credit Card Debt. Once you have confronted and changed the reasons why you are in this debt in the first place, you need to evaluate your options. Each option should be considered and the best option should be picked depending on your level of debt. Remember that a debt, even with better terms, is still a debt and you should be diligent about paying it off before adding to it. A smart move would be to look at what the consolidation will cost you over the total life of the loan, not just the monthly payments. Savings now usually cost you more in the end.
"L" stands for Learn Smart Money Management. Eliminating the debt is only part of the problem. Learning money management skills is a major part of this process. Managing money now will not only help repay the debt off faster but it will also keep you out of debt once the process is over. Use an debit card instead of a credit card or use paper instead of plastic.
"P" stands for Protect Yourself and Your Assets. By following this process and staying disciplined to stay out of debt you will be protecting yourself and your assets. Learn from this experience because you may not get the same chance again. Remember that getting out of debt is very important, but changing your spending habits and staying out of debt is equally important.
The bottom line is that your debt will not magically disappear if you choose not to do anything about it. Your debt problem will continue to get worse and the balances that you owe will continue to grow with finance charges, late fees and ultimately damage your credit, preventing you from getting any kind of credit card and/or loan.
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