Did Black Friday Send You Into Credit Card Debt?

If you’re having a hard time figuring out where your Christmas money’s coming from, or trying to juggle maxed out credit cards, you might need to stop with the merrymaking and take a look at your overall financial situation. No, it can’t wait until after New Year’s, and it shouldn’t. Between now and that New Year’s resolution could be a few thousand more in debt piling up interest charges. If you’re reluctant to face financial reality during the holidays, you’re not alone.

Debt is a Household Name

Between student loans, mortgages, and credit card debt, the average person is struggling under a load of debt that would have been unthinkable a generation ago. Add to this, the wage stagnation at every stage of the career ladder. Technically, Americans have not had a raise since about 1979, and have used borrowing to fill the gaps when it comes to everything from buying the groceries to paying for college. Once you’re in debt, it’s very hard to get out, even if you do have a good paycheck coming in. With so much going to service the debt, there’s very little left to save or spend, so the answer is more credit and more borrowing. At the moment, average household debt stands at $67,400 and average household credit card debt at $2,500. Of course, these numbers mean that some households are in far deeper debt.

No Silver Bullet

Just as you didn’t get into debt overnight, you’re not going to get out of it, either. There are some steps that you have to take first.

• Get your credit report.
• Make a list of all your debts including mortgage, car payment, student loans, medical bills, credit cards, and personal loans.
• Next to each creditor, list the balance, interest rate, and minimum monthly payment.
• Make another list of all your monthly living expenditures – rent, food, transportation, medicines, personal care, and household bills.
• Determine your total monthly income, and if you can make the total of your monthly payments.
• If not, start looking for ways to trim down your expenses, and try to negotiate lower interest on outstanding balances for credit cards and car loans.
• You may want to consider a consolidation loan to knock out your credit card debt, and potentially saving a bundle in interest. It’s also possible to refinance your car loan.
• Look for ways to trim expenses, such as getting rid of a second car and taking more public transportation, or brown-bagging lunches to work instead of spending $10 or more a day to get lunch from a restaurant.
• You may want to take credit counseling, and set up a debt management plan or even figure out if you should file for bankruptcy.

Think of this as a three year plan to put you back on the road to solvency. Any time you need us, we can help you with all sorts of procedures to get you back in shape from student loans to personal bankruptcy. We’ve helped a lot of people, and we can help you, too.