Riskiest Strategies for Paying Down Credit Card Debt
As long as you have available credit on your credit card, it is easy to ignore the fact that the balances keep creeping higher every month. You keep making the minimum payments each month and then unthinkingly swiping the plastic every time you get to the part of the month where “paycheck to paycheck” is a euphemism. This can go on for years before you realize that it is a problem and decide to prioritize paying down your credit card debt. Sometimes the first sign of trouble is that your minimum payments become unaffordable; you can ignore the fact that, technically, you owe tens of thousands of dollars in credit card debt, but it is the $500 per month minimum payment that really hurts. In other cases, the sign that makes you take notice is that your credit card is maxed out, so that you cannot use it as a stopgap source of funding the way you had been doing for years. Once you can no longer ignore your credit card debt, you are eager to pay it down, but some of the fastest ways for repaying credit card debt can make your overall financial situation worse. If credit card debt is stressing you out and you need help thinking clearly about how to pay it down, contact a Philadelphia debt relief lawyer.
Early Withdrawals From Retirement Accounts
The financial stability you get from a retirement account is greater than the financial instability you get from carrying a balance on your credit card. It is tempting to borrow money from your future self to pay down your credit cards so that you are not stuck making minimum payments on a maxed-out card, but taking an early withdrawal from your retirement account creates more problems than you solve. The penalty for early withdrawals is greater than the money you will save on interest by paying off your credit card with money from your retirement account.
Home Equity Lines of Credit
Home equity lines of credit (HELOCs) tend to have lower interest rates than credit cards, because you secure them with your home equity. They are ideal for financing the cost of home renovations. Using them to pay credit card debt is as unwise as using your retirement account to pay for it.
Charging Purchases on Buy Now Pay Later Instead of Credit Cards
If your credit card is maxed out, buy now pay later (BNPL) is an easy option for making purchases you cannot afford, but the problem is that you cannot afford them. Soon you will be struggling to service your credit card debt while you are also making the minimum payments on your BNPL balance.
Contact CONSUMERLAWPA.com About Debt Collection Lawsuits
A Philadelphia consumer law attorney can help you if you are barely able to make the minimum payments on your credit card debt but you do not want to put your assets at risk. Contact CONSUMERLAWPA.com to set up a free, confidential consultation.
Source:
msn.com/en-us/money/realestate/the-worst-strategies-used-to-try-to-pay-off-credit-card-debt/ar-AA1Ne2Mc?ocid=msedgntp&pc=ACTS&cvid=68ed0808d9a241009ae9e62f9308bbd5&ei=14
