10 ways we can make debt suck a little less in your life.
The Debt Suckers are gruesome twosome bent on ruining your financial outlook and it’s up to you to protect your money and credit so you can avoid financial distress. The infographic below helps you understand how the frustrating pair can bring so much financial upheaval. If you’re struggling with debt, call Consolidated Credit today at (844) 276-1544 to request a free, confidential debt analysis from a certified credit counselor.
Tag teaming into debt problems
The main problem with the Debt Suckers is that they work together to hold you back – and once both of them get started it can be hard to regain control. Here’s the real crux of the situation so you know what you’re really facing…
- Hi-rate hangs around almost anytime you have revolving debt. Debts like credit cards, store cards and gas cards have high interest rates. The average rate is usually around 15% APR but it can be upwards of 20% on things like rewards credit cards and specialty store cards.
- Hi-rate is easy to manage when he’s by himself. If you don’t have high account balances, then Hi-rate can’t really do much damage on his own. In fact, if you pay off your debts in-full before the end of the grace period every month, he disappears completely. But even so, a high interest rate applied to a low balance doesn’t do much damage.
- When Hi-pay joins the mix problems start. Once Hi-rate’s brother shows up, things start to get worse. Hi-pay means you have high balances, because revolving debt payments increase based on how much you owe. So now you have a big balance for Hi-rate to feed off of and this can cause issues.
- Hi-pay doesn’t pay off quickly. The real issue with hi-pay is that he’s happy to drain your bank accounts with big monthly payments, but since his brother is still hanging around those big payments do almost nothing to eliminate the debt. Instead, that large payment gets eaten up by high interest.
This is why it’s so hard to eliminate credit card debt once your balances pass a certain threshold. You make payments every month, but don’t ever seem to make any progress in getting closer to zero. You keep up, but your essentially just spinning your wheels without getting anywhere.
In this case, you need to find an alternative payment option that helps reduce the burden of one or both Debt Suckers. For instance, by consolidating debt, you often reduce or eliminate the interest rate applied to the debt, while at the same time you lower your monthly payments. At low or no interest, even with smaller payments you can eliminate the debt faster than you could have before consolidation.