Have you spent a bit too much over the holidays and you’re thinking about credit card debt consolidation?
Or has credit card debt become a regular occurence in your life and you’re just looking for a way out?
Whatever the case may be, it’s not uncommon these days for many people to find themselves buried underneath the weight of credit card debt. And it’s not because you’re reckless or can’t control your spending, in fact the top 5 reasons for credit card debt are as follows:
- Credit cards allow you to spend more than you make and most people simply aren’t paying attention.
- Financial emergencies account for a huge portion of most people’s debt.
- You fell for the card-rewards trick.
- You’re used to just paying the minimum amount.
- You simply have too many cards.
The fact is, if you can’t increase the amount of money you make then the chances of you paying off your credit card debt doing the same things you’ve been doing, simply won’t work. And the usual borrowing more money for credit card debt consolidation is not the answer.
You’re going to have to try a different strategy. There is really only one strategy that will work and here it is.
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Cut up all of your credit cards, except one. Keep one for emergencies. The amount of air travel points that you’ve accumulated on your cards will never make up for the amount of interest that you’ll have to pay. You can still use your accumulated points, but don’t use the credit cards.
Pay the minimum amount on all of you cards except one, the one with the most accumulated debt. On that card, pay the minimum, plus an additional minimum of $100 or preferably whatever you can afford. If you can swing $200, then pay $200. If you only pay the minimum, your credit cards will never ever get paid off.
Once that one card is paid off, then continue paying the minimum amount on the remaining cards except for one, the one with the next most accumulated debt. Pay the minimum on that card plus $100 and plus the amount that you were paying off the first card. This means that if you were paying $200 on the first card, start applying that amount to the second card plus an additional minimum of $100 or more, whatever you can afford.
Once all of your cards are paid off, celebrate with a loved one. But instead of celebrating with your credit card, celebrate with cash. The cash you would have used to pay down your credit cards.
Never let credit card debt get back to the place that you were in before.
Now, if you’re thinking, “easier said than done,” you could be right. But not doing anything is much worse. On the other hand, if you’ve already tried this strategy and its not working, then you may be a good candidate for consumer proposal. That is where we can help you negotiate your debt, often up to 70% of what you owe. It’s not a perfect solution but we’ve been helping Canadians with consumer proposal for many years and it may be your best option as opposed to bankruptcy.
Consumer proposal is often preferable to credit card debt consolidation because you would actually owe much less than what you owe. When you choose credit card debt consolidation you’re basically taking out a high interest loan to pay off your credit cards. This loan would be against your property such as your house or cars. But, you still owe the full amount.
Finally, credit card debt consolidation is usually the strategy tried by most Canadians, but it doesn’t solve the top 5 reasons for getting into debt in the first place. In fact, most people will continue to rack up credit card debt even after consolidating. This means that you now have to pay your credit card debt loan and the new debt on your credit cards. This never ends well.
At Sheriff, Sole & Madej Inc, we’re masters in helping Canadians with debt. If you need help, give us a call. You call is confidential and we’ll lend a sympathetic ear. Let’s talk today before things get really out of hand. 1-844-482-3328