As promised in my previous post, here are some of the warning signs that you or someone you know is drowning in debt:
1. Credit cards are maxed out – remember that a credit card balance is a loan that must be repaid. And the interest you’re paying for the convenience of paying with plastic is costing you money every month you maintain a balance. Many of us get into credit card chaos because we can’t afford the items we charge. Ideally, a credit card should be used for an emergency. If you prefer plastic to paper, use a debit card. That way you’ll be paying with money you have instead of using the bank’s funds that must be repaid with interest.
2. Sending the minimum monthly payment on your credit card – if you have a $3,000.00 balance and your interest rate in 12%, the card issuer will require a minimum payment of about sixty dollars a month. At that rate, it will take you nearly twenty-one years to pay off the balance (assuming you don’t charge anything else). Do you want to be paying for things you charged last weekend in 2028?
3. You’ve been turned down for credit – this means your current credit balances are too high, your credit score is too low or a combination of both. If you’ve been denied credit, the financial institution to which you applied considers you a poor risk. There is no quick fix to improve credit scores. However, paying your revolving/installment loans on time will strengthen your credit profile and make you much more attractive to a prospective lender.
To find out your credit score, do a web search for credit score providers. One of my personal favorites is www.myfico.com
Own the power of your personal finances and retire a millionaire!
Marc Woolf
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