Top 5 At 7:45 – The Dumbest Things We Can Do If We Have Too Much Debt
It has been said that debt is man's worst enemy. It is easier to find yourself in debt than it is to get out of bed in the morning. I recently had a conversation with someone who knows about debt, how to get out of it and what not to do should be find ourselves owing people and creditors money in mass.
Today on the Top 5 at 7:45, I'll highlight our conversation concerning the dumbest things that we can do if we have too much debt. The Top 5 at 7:45 airs weekdays on KGAB Mornings with me, Gary Freeman and is brought to you by First Eduction Federal Credit Union.
- Minimum Payments - Only paying the "minimum" on a credit card debt or loan is set to keep you in debt.
- Friends and Family - Your relationship will surely be damaged once you cosign for a loan. In many peoples experience, the cosigner ends up paying for the loan to protect their line of credit. Either give the money to pay or don't cosign at all.
- Unscrupulous Credit Counselors - These folks may demand high fees for the help that they promise to give you. However, many of them simply don't deliver on those "promises."
- Declaring Bankruptcy - For many people this is morally wrong. A person should pay their debts, However, this can have severe and long-lasting effects on the future of your finances and credit. Avoid this if you are able.
- Debt Consolidation - Avoid these pitfalls as they are just that....pitfalls. It may be easier to make one payment, but you will pay loads of interest on top of it. On top of this, be careful not to borrow from your 401K plan as most likely will be penalized and may not be able to add any more into your 401K until you have paid back the amount you borrowed.