By Manuel Tovar, August 04 – Hispanic Solutions Group
Free yourself from the debts of Credit cards because they charge you very high interest rates. According to recent surveys carried out in the United States, they have just confirmed that among older adults due to the pandemic, they have many difficulties to be able to make monthly payments on their debts while their balances grow. Even people who are not experiencing pandemic problems have increased their debts credit card and pay much more interest than before, which they should try to avoid.
Therefore, we must end these debts. If you have a debt of $ 5,000, at current interest rates, slightly above 16%, you are paying about $ 67 a month in interest. That loss of money gets in the way of everything else you want to do, including your peace of mind and that of your family.
Assuming you’ve already looked for money from everywhere to pay off balances: you’ve held a garage sale, have a second job, sold a car, or used part of the money. tax refund or the stimulus check. That’s fine, since every additional dollar you pay above the minimum is a dollar that you will not pay interest on.
But if you continue to have financial problems, you have not run out of options. Lenders understand that household budgets They have been contracted, and there are signs of both an increase in temporary debts and new card offers that can make it easier for you to get out of debt.
After these comments, we recommend that: do not stop paying or delay the minimum payments while you design your strategy. If you do, you credit score it will go down and some of the best solutions will appear.
Here are four different strategies that can help you solve your current problem and ease your financial burden and stress.
- Transfer your balance
Zero-interest balance transfer offers for cards were rare in 2020, but now more are emerging, says credit card expert Rathner, These cards typically charge up to 5% of the transferred balance upfront. So this only works if you land an introductory offer long enough to have a big effect on your balance.
- Request a suspension
It is known that COVID-19 it has made card issuers more flexible. Since the beginning of 2020, approximately 83% of the people who asked to be interest rates will drop they succeeded, it was reported. Many card issuers have also offered special programs for cardholders with problems, said McClary, a specialist, who suggests that you tell your lender that the coronavirus affected your finances and that you intend to maintain payments and reduce balances, but that more affordable conditions would help you. The issuer can temporarily lower the interest rate for six to nine months, he said.
- Refinance with a personal loan
We suggest that you ask your credit union or bank if you can accumulate all your card debt in a single loan with a lower interest. The average rate on a two-year personal loan from a bank was below 10% at the end of 2020, according to the Federal Reserve. It could be a better offer than what you can get from your card issuer. You do not have to request a loan on your home (house) or your car to pay your card; that creates a new risk of losing your possessions. And don’t choose “debt consolidation loans” from companies you’ve never heard of. Chances are high that you will be charged new fees or, worse yet, that you run the risk of being cheat.
- Make a plan
Finally, a final solution is to create a payment plan through a credit counseling agency. An advisor will review your income and debts and determine what can be done. The counselor will then negotiate with the lenders, usually getting them to agree to a repayment plan that lowers interest and monthly payments, and maybe some debt forgiveness. If they reject the plan, your situation will not get worse. Accept it, and you’ll start making monthly payments to the advisory service, which in turn will pay issuers. You will likely have to pay a small fee and forgo the cards included in the plan. But in time you will be able to pay the debt and rebuild your credit. And most importantly, you can let go of the burden and worry of your debt.
After all of the above, tand we invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagram to find more information related to finances. Also on our YouTube channel The Credit Channel to learn how to improve your credit. If you need help in repairing your credit, disputing debts that do not belong to you, or other services, call us at (612) 216-1599.