*To read an even more in depth solution, try this site for homeonwers: www.FromBillsToFreedom.com
Here's why credit cards can be a dangerous house of cards if you ever meet hard times.
Let's say you have 5 credit cards at a total of $20,000.
Let's say your average interest rate was 10%.
And let's say you suddenly miss a payment. Then you miss a payment on each one.
Right off the bat your interest rates go to 30%! And you have a late fee penalty of $35 per account!
That's 5 x $35 or $125 in late fees.
Plus your annual interest is now $6,000 alone! Plus $1,500 in late fees. That means you are now paying $7,500 in interest and penalties on $20,000! That means your true interest rate is 37%!
That means you're paying $625 dollars a month before you've touched a dime in principal!
There is no way any sane person can get out of this hell on their own. So if you ever do see hard times coming, get help before it's too late. At the very least you need to explore options the minute you have balances on more than 3 cards or you have more than $10,000 in credit card debt!
Because the minute you start making late payments, or go over your limit, or borrow more on a credit card...your credit score instantly begins to drop and this makes any financing way way way more expensive.
I hope this message helps somebody, somewhere.
All the best,
Dan Dowling
Altamonte Springs, FL (Orlando suburb)
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