Ned is a 61-year-old shoe salesman in Coconut Creek, Florida. After once making a six figure salary as a mortgage salesman, he experienced a devastating medical condition in 1988, a bankruptcy in 1997, and two divorces. After losing his job at the mortgage company when the housing market collapsed, NeHd was forced to work on commission selling shoes at a Boca Raton department store. Currently, as the banks he used to work with received hundreds of billions of dollars from the government, Ned’s credit card API is an astounding 31.99%. Though Ned has worked hard to get himself out of debt and has never missed a payment, the credit card companies refuse to lower the rate. With a rate that high, it has become all but impossible for Ned to work his way out of debt. He can’t even consider retirement anymore.
Living the good life…crippled in debt
Ellis is a hot-shot lawyer living in Denver, Colorado. His wife, Becky, is also a lawyer, and they and their 3 kids live a privileged lifestyle in the suburbs. They have a fancy home, fancy cars, and send their kids to the best schools. This caused Ellis to rack up a sizeable credit card bill every month. Unfortunately, Ellis didn’t realize that just paying your bills on time is not enough. The amount of debt you owe is almost equally important. Thus, with $52,000 of credit card debt to his name, Ellis and Becky had a credit rating significantly lower than most of the country despite being in the top income bracket. As a result, they couldn’t refinance their home when the mortgage rates got lower, costing Ellis’ family over $200,000 over the life of the mortgage and sinking the once well-off family even further in debt.
Ruined by lowering limits
Verne was experiencing no problems with his credit. He always paid his bills on time, and always paid them off well enough so that he was never in too much debt. All was going well until Verne’s credit card companies increased his limits to $70,000/month. Verne thought this was too high: he had never spent more than $15,000/month, and he didn’t want to think about spending more than that. Verne learned the hard way that higher credit card limits is never a bad thing. After calling his credit card company to lower his limit, Verne soon racked up $12,000 in legal fees and $10,000 in other expenses. After nearly maxing out his $40,000, Verne eventually had to close a few accounts, saw his rates skyrocket, his business fall into disarray and his credit score plummet.
How to avoid a nightmare scenario
All these stories are tragic, and all could have been avoided. When credit card debt becomes too astronomical a debt consolidation loan combines all sources of debts into one bottom line. This helps you be realistic with the amount you owe and how much you have to work to pay it off. It’s still up to you to manage your debt responsibility. You don’t have to struggle to pay off your debt bill by bill. A debt consolidation loan is an easy and reliable way get the debt relief you need. Fill out our easy-to-use online form and get on your way to ridding yourself of debt once and for all.
Related posts:
- Identifying the different types of debt
- Guide to Getting Out of Debt
- What are Adjustable Rate Mortgages?
- Improving your Credit Card Limits
- A Budget Is KEY!
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