“You fall a bit behind on a credit card bill, your interest rate soars, your minimum payment rises, and you start falling more and more behind every month. You don't see an end. But you don't want to file bankruptcy either. What you can do - and should do - is negotiate.” WantShouldEndsFallBitsInterestCan DoBehindsMonthsBillsRateCreditCardsMinimumSoarFilesPaymentCredit CardBankruptcyInterest Rate Author:Jean Chatzky
“Once the settlement is completed, the credit card company will report it to the credit bureaus, which will then make a notation on your credit report that that account was paid by settlement. That's going to signal to future lenders that you left the last guy hanging. That's why, as with bankruptcy, debt settlement is an extreme option, one you shouldn't take lightly. It's not just an easy, cheap way to eliminate debt.” WayLastsGuyLeftEasyCompanyAccountsPaidExtremesCreditDebtCardsReportsSignalsCredit CardSettlementBankruptcyLendersDebt Settlement Author:Jean Chatzky
“A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.” PeopleIfsUseHomeInterestLinesPayStudentsRateCreditDebtCardsMake SenseExpensiveEquityLoanMortgageCheaperCredit CardInterest RateStudent LoanConsolidationHome Equity Author:Jean Chatzky
“You also need to understand that when you consolidate credit card debt into mortgage debt - like a home equity loan or a HELOC [ home equity line of credit ] - you're taking an unsecured debt and turning it into a secured debt.” NeedsHomeLinesCreditDebtCardsEquityLoanMortgageCredit CardSecuredCredit Card DebtHome Equity Author:Jean Chatzky
“When you default on a secured debt, the creditor takes the asset that backs up that debt. When you convert credit card debt to mortgage debt, you are securing that credit card debt with your home. That's a risky proposition.” HomeCreditDebtCardsAssetsPropositionsMortgageCredit CardDefaultSecuredCreditorsCredit Card Debt Author:Jean Chatzky
“In about one-third of credit card consolidations, within a short period of time, the cards come back out of the wallet, and in no time at all, they're charged back up. Then you're in an even worse position, because you have the credit card debt and the consolidation loan to worry about. You're in a hole that's twice as deep - and twice as steep.” WorryPositionPeriodsThirdsCreditDebtHolesCardsLoanCredit CardWalletsSteepConsolidationCredit Card Debt Author:Jean Chatzky
“You must be sure - and I mean absolutely positive - that you have the willpower to pay off those credit cards and not use them again.” MeanUsePayCreditCardsWillpowerCredit Card Author:Jean Chatzky
“Take the cards out of your wallet. A debit card is accepted just about everywhere that credit cards are, and you'll be spending money you have - always a good thing.” Good ThingsCreditSpendingAcceptedCardsCredit CardWalletsSpending MoneyDebitDebit Cards Author:Jean Chatzky
“Don't let the fact that you're spending time getting organized result in late fees on your credit card bills.” FactsResultsLateBillsCreditSpendingCardsOrganizedCredit CardFeesSpending Time Book:Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever Source: Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever
