Credit Card Debt Is Unsecured Debt

Category: Finance, Credit.

There are a million people out there telling you how to pay off your debt. For many it takes a combination of different methods to find a formula for success.

You have to consider your personal spending habits and reasons before you are able to make a debt repayment plan that works for you. There are a few methods you should avoid. There are no assets that can be taken if you fail to pay them like you car, home or belongings. Credit card debt is unsecured debt. A mortgage, equity loan or line of credit is a secured debt. You should also avoid using a 401( k) loan to pay off your debts. If you don t pay these you will lose your home.

Your contributions to your 401( k) are not taxed. When you take money out for retirement, you will absolutely be taxed for it again. When you pay yourself back you are using after- tax money, but you are still losing money. Not a great financial move. Create a budget, pay more on, spend less your debt, negotiate with your lenders and work hard. So don t use your home or your retirement as a way to bail yourself out of debt. Mary Hunt is one of the top financial- guru s of our time.

What sets her apart from all the other authors is that she conquered those same staggering debts in her own life. Here are her top four recommendations. No more new debt and this should be self- evident. If the debts you re currently paying have declining minimum payments, you must pay the same amount every month until those debts are paid. No debt payoff plan will work, not a one of them, if you re taking on more debt. Disregard any declining minimum payments. After a few months, you re accomplishing exactly what financial pros advise: Always pay more than the minimum.

Keep paying the same amount towards the debt, or more if possible, month in and month out. List your debts according to" duration until payoff" (balance plus interest, divided by payment) . From there, list each debt in ascending order, by duration until payoff. The debt with the shortest payoff time goes at the top. Now rearrange your debts in order of smallest" duration until payoff" to largest. Another occurrence of the snowball method of debt payoff is to compound your payments.

This is the order in which to launch your torpedoes and start sinking those debts. When you pay off one debt in full, take its monthly payment and add it to the payment of the next debt. When that debt is paid off, take its payment money and add it to the next payment and so on.

Read more...

The Symptoms Of Debt Stress - Finance and Credit:

In all the technical discussion you hear about credit card debt, the best ways to manage it and pay it off and all the rest, one thing goes largely ignored.