Carrying any type of debt can be hazardous to your long-term financial health. Here are six quick tips for dealing with debt, from Get a Financial Life by Beth Kobliner.
- Take any savings you have and pay off your high-rate credit card debt. Paying off a balance on a credit card that charges 14% is the equivalent of earning more than 14% interest on your money after taxes. This is the best investment you can make.
- If you have a decent credit history and you can’t pay off your high-rate credit card debt immediately, try to get a low-rate credit card and transfer your debt to it. You can find listing of low-rate cards on sites like www.credit.com, www.cardtrak.com, and www.lowcards.com.
- If you’re having trouble paying off your student loans, speak with your loan servicer to find a repayment plan that works better for you.
- Before you visit a car dealership, shop around to get an idea of current auto loan rates and car pricing information. Then, once you find the car you want, negotiate an exact price for a car with the dealer before you discuss the financing he has to offer.
- If you own a home, think twice before taking out a home equity line in order to pay off the loans you’re refinancing.
- Get free copies of your credit reports from www.annualcreditreport.com (877-322-8228) and buy your credit scores from www.myfico.com. If you’ve been a victim of identity theft, call the credit bureaus’ fraud department to have a fraud alert placed on your file.