One way to approach mounting credit card debt
Many Americans find themselves in over their heads when it comes to credit card debt. They have difficulty making their payments on time and find that their credit lines are stretched to the maximum limits. But even if you are able to make your monthly card payments on time and still have at least a 30% cushion available on every credit line, you should still consider taking out a home mortgage to pay off your credit card debt. This is certainly not appropriate for every consumer. But if your credit card debt is substantial, if you can only pay the monthly minimums, or if you find yourself spending 30%50% of your monthly income paying credit card bills alone, talk to a lending institution about taking out a home mortgage loan.
Reduce your interest rates
If your credit card debt is substantial and you can only afford to make the monthly minimum payments, paying off your credit card accounts immediately through a home mortgage can save you significant sums of money, especially in the long. For example, the average American has $5000 in credit card debt at 16% interest. Depending on your level of income, cost of living, and personal financial obligations, paying down $5000 may or may not be a problem. But for many families, five grand is a challenging sum to amass overnight. If you stopped charging anything to your cards and made only the minimum monthly payments, it would take you 12 years to pay off $5000 in credit card debt. And at 16% interest, you would pay the credit card company an extra $2500 dollars. Most personal loans derived from home mortgages are more competitively priced than your average credit card. It is not unrealistic to find a home mortgage loan for as low as 10%, which will save you money if you use the loan to pay off your credit cards.
Increase your credit score
Transferring your credit card debt to a personal loan from a home mortgage gives you the opportunity to improve your credit. By transferring your debt from a multitude of revolving credit accounts to a single home loan mortgage, you have demonstrated two things to the credit bureau that can increase your credit score. First, you have shown that you can manage your debt by paying down your credit cards. Secondly, you have diversified the different types of debt you can manage.
Access to extra cash in a matter of days
While access to extra cash to pay off credit card debt quickly can give you greater control over your bills and put on the path to financial freedom, only you can control the financial decisions you choose to make in the future. After paying off your credit cards, use no more than 3 of them on a monthly basis. To capitalize the most on your credit history, select the three oldest accounts you have. Make sure you dont fall back into old habits. Charge no more than you can pay in full at the end of every month. If one month you cannot pay the balance in full, immediately stop using the card until you have.
Additional Resources:
card payments, credit card accounts, credit card bills, credit card debt, credit cards, Credit Score, home mortgage loan, home mortgages, lending institution, mortgages, personal loansRead More...
[Source: Mortgage Blog]
No comments:
Post a Comment