5 Reasons You Will Never Get Out Of Debt

Saw this article and had to share with you. – Justin Flores

(ARA lifestyle) – If you have a lot of credit card debt, you may believe you will never be able to pay it off. Credit card companies want to keep you in debt because they make more money that way, and with the passage of new federal legislation they are looking for new ways to charge you more.

1. There is now no cap on interest rates. With the passage of the Credit CARD Act of 2009 creditors can now raise interest rates as high as they want. Some credit cards have already risen to a staggering 59.9 percent APR.

2. Creditors can cut your lifeline at any moment. Credit card companies can abruptly decide to close your account or critically lower your credit limit without warning, which may leave you helpless toward covering everyday expenses like groceries. They may even alter your agreement so your full balance begins being due at the end of the month instead of letting you carry over the balance month to month.

3. Creditors want you to fear them. Banks have teams of lawyers working on their behalf, and it is very intimidating to try to stand up against them. They don’t want you to know about certified debt negotiators, like Preferred Financial Services, who have had enormous success at negotiating and removing debt for thousands of Americans by putting a stop to outrageous interest charges and substantially reducing the amount you owe. Go to PFSDebtRelief.com to get a free, no-obligation quote, and find out how much you could start saving today.

4. Creditors can issue new fees at their discretion. To combat new restrictions enacted by the government, creditors are just coming up with new hidden fees to generate profit. If you don’t know how your agreement has changed recently you are probably overpaying. An experienced debt advocate can help get unnecessary fees removed from your balances.

5. Credit card companies don’t want you to know you can lower your balance. There are many programs and rights that you have as an individual that can remove late fees, reduce or stop interest and substantially cut your principal balance. The banks will never disclose any of this to you, but with the help of an expert debt settlement professional the outcome can be life changing.

GET SMART ABOUT CREDIT DAY Is Today (Oct 21)

Using credit cards unwisely can lead to a mountain of credit card debt that’s nearly impossible to overcome. But how do you know if you’re using your cards unwisely? Here are some ways to tell you’re for credit card debt.

1. You use credit to meet basic needs

Your income should be used to buy everyday items like food, clothing, and gas. Having to use credit cards to cover these types of purchases is a sign of financial trouble.

2. You transfer balances to avoid credit card payments

There are times when a credit card balance transfer makes sense, like to consolidate credit card balances or to get a lower interest rate. However, frequently transferring balances instead of making credit card payments is a red flag.

3. You skip one credit card bill to pay another

Prioritizing credit card payments is wise. But skipping payments is always unwise. If you consistently find yourself too strapped for cash to make your credit card payments, you are already in credit card trouble.

4. You avoid or ignore credit card statements

If only wishing away credit cards actually made them go away. Pretending your credit card debt doesn’t exist only gives it time to grow. Facing credit card debt sooner gives you the opportunity to tackle debt before it gets out of control.

5. You charge more than you pay

Imagine trying to fill a hole while someone shoveled out more dirt than you put in. Your hole would never get filled would it? It’s the same with debt. If you’re charging more than you’re paying, your credit card debt will always continue to increase.

6. You don’t have an emergency fund

If you don’t have an emergency fund, you’ll feel forced to use your credit card in emergency situations. Credit card debt created because of large, unexpected expenses can be hard to pay off, especially if your budget is already stretched.

7. You don’t have a plan to pay off your credit card debt

You know what they say, “Failing to plan is planning to fail.” If you’re not actively working to pay off your credit card balances, you could end up unnecessarily paying on the cards for years to come. Whether you have excessive credit card debt or not, you should always have a plan to pay off your balances.

8. You use credit to “afford” expensive items

The allure of credit is that it tricks us into thinking we can afford to buy more than we really can. Truth is, only extra income or lower expenses (or both) enables you to afford more expensive items. Incurring credit card debt to maintain a lifestyle you really can’t afford isn’t a wise decision for your future income.

9. You have past due accounts

If you have credit cards that are currently past due, you’ve probably run into unfortunate financial trouble that’s keeping your from making payments. Remember, the more past due your accounts become, the harder it will be to bring them current again. Take a look at your monthly budget for money you could spend to get your credit accounts back on track.

10. You have maxed out credit cards

If your credit cards are all maxed out, you’re not headed for credit card debt, you’re already in it. What next? Make a decision to pay off your credit card debt and to make wiser choices about using your credit cards in the future.

When NOT to use your credit card

What’s the strangest thing that you’ve ever put on your credit card? I learned when to never ever pull out your credit card. Here are a few times from Yahoo Finance:

  • After midnight – Tends to be when people let it all hang out — even financially.
  • When you’re near your credit limit – You don’t want to be even within a couple hundred of your limit or your credit score will go down.
  • If you think you’re building your credit history – While your credit score goes up if you pay off the purchases you make, putting items on a credit card without paying them off will have the opposite effect on your score.
  • If you can’t pay for half of the purchase with cash on hand – Say you need new tires, if you don’t have half the money right now to pay for the repairs, wait until you do.
  • When it’s all about the rewards points – Rewards points should be nowhere in the equation for making that decision or not making it.
  • When you think prices may drop – For many things in our society, we’re starting to see deflation. If you think it’s going to cost less in three months, why start paying interest on it today?
  • To buy something from a website with an obscure foreign extension – Don’t charge online if you don’t know who you are dealing with. Study the website — watch for suspicious wording — to make sure it is legitimate.

By the way, why not shop local? If it needs to be ordered, our awesome local vendors can hook you up! I know cause I’ve used them for that service. Have a financially stable and secure weekend. – Justin