A Quote by Jean Chatzky
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.
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Those carrying a credit card balance should scale back to making the minimum payment each month so they have more money to put into savings.
If you do not have at least an eight-month emergency fund, and you think there's a probability you could loose your job - and it's not just losing your job; you could be in a car accident, get sick - continue to pay the minimum on your credit card every month. Everything beyond that needs to go to establish an emergency fund. And if you have an emergency fund saved, then fund your retirement account before paying down credit card debt.
If you have credit card debt and credit card companies continue to close down the cards, what are you going to do? What are you going to do if they raise your interest rates to 32 percent? That's five times higher than what your kid is going to pay in interest on a student loan. Get rid of your credit card debt.
Your goal should be to pay off your credit card bills in full at the end of each month and set aside money toward your emergency savings.
I believe that what works for the consumer is to be able to determine what they can pay -- even if it is nothing. (Just joking.) Unfortunately, so many depend on credit for living expenses, and the lower payments helped them in the immediate term. I am OK with that. For those who want their minimum to be more, you don't have to wait on your credit issuer to increase the payment -- do it on your own. For others, at this time, I think it's a horrible idea.
Absolutely pay off credit card debt. If you're not getting a match in your 401(k) and you've got credit card debt, you've got to get yourself out of credit card debt. When you get out of credit card debt, your credit score goes up and interest starts to go down.
If you have a debt issue or credit card issue, start dealing with it. If you have a tax issue, don't just say, 'I'm not going to file.' There are ways to deal with these things, but you must communicate with your creditors, whether it's a credit card company or tax department.
Simply calling your credit card issuer and asking them to lower your interest rate may yield immediate savings.
But credit card debt is unsecured debt, which means if you get in trouble and cannot pay off your credit card, you can discharge it in bankruptcy. What are they going do to you? If you're in a financial position to just methodically pay off both credit card and student loans, pay them all.
If you pay your credit card off every month, get a rewards card. One that gives you airline miles or that will give you 1 percent cash back at least on every purchase.
First, pay off your high-interest-rate debt. If you have student loan debt - that's low interest rate; that has a tax benefit - you can leave that out. A mortgage can be an OK one. Credit card debt is poison. That needs to be paid off right away.
Even if you were to fall into extreme financial hardship and file for bankruptcy, you need to understand that your student loan debt will not be discharged in bankruptcy. It is the Velcro of all debts.
When I was young, people lived from paycheck to paycheck. Today, it seems like they live from credit card payment to credit card payment.
When I was young, people lived paycheck to paycheck. Today, it seems like they live from credit card payment to credit card payment.
A cash advance on a credit card is one of the worst types of borrowing because the interest rate is typically 21 percent or more.
Your wealth is the value of your assets - your retirement accounts, your home, the unsold stocks - minus your debts, like your credit-card bill and your mortgage.
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