How does your debt situation stack up with the US average? Most Americans are a Covid related job loss or medical nightmare away from a debt meltdown. If your debt situation is average(or worse) you need to come up with a plan now.
If you are the type of person who is responsible with debt than maybe this article is not for you. Just remember that the majority of this country has revolving debts and could manage it better. Offer friendly advice….but keep saying no to co-signing loans.
What percentage of your take home pay goes to minimum payments and loans? If you are like the average person, you spend at least $3000 a year in interest. Research all your options before taking action and pick the right solution for you and your debt situation.
Lots of debt and good credit? Your good credit score will be the biggest help for consolidation, balance transfer, or refinancing debt at s lower interest rate.
Lots of Debt and a bad credit score? If you already have debts in collection or charge offs….which can still be pursued by creditor, debt management plans or settlement plans won’t make your credit score too much worse.
Low debt and good credit? Thanks for reading this far!
Options For Reducing Debt
No matter which option you choose the first action to take is changing your habits with debt if possible. Emergency situations like job loss or medical bills are a different matter.
- Balance transfer to lower interest card
- Consolidation loan
- Home equity line of credit
- 401k loan
- Credit counseling
- Debt management plan
- Debt settlement plan
- Bankruptcy
Credit counseling(a little), debt management plans and debt settlement plans will hurt your credit score. Be especially cautious of any plan that wants you to skip payments and go into collections. This will shave at least 100 points off your credit score and You need to have a good plan ahead of time.
This is some of the latest on American debt:
Credit cards:
- 60% of Americans have credit card debt with an average balance of $5,500 per person and $22,000 per household.
- $120 is the average minimum card payment
- Most people have 4 separate cards.
- $500 dollars a month go towards minimum payments.
Car loans:
- $32,000 is the average loan size.
- 72 to 84 month loan term.
- The average car payment is $550 for a new car and $390 for a used car.
- The majority of loans are never paid off…just rolled into a new car loan.
Read more at denyingdebt.com
