YOU'RE FIRED!

    If you are like most people, you have credit card debt. How much depends on circumstances, and your job.  Most Real Estate professionals are self employed. As a result our income is not always predictable because it depends n so many diffrent factors. However, at one point or another, you have probably pulled out that "plastic life line" and swore to yourself that when the bill arrived you would pay it off. But like most people, you didn't.  If you used your "plastic life line" to fund your business start up, you may be serious trouble especially if you got into the business  less than two years ago.

It does not take long to build up debt. It does however, take a very long time to pay it down. American debt is at an all time high.  As the cost of basic necessities rises, more and more consumers resorted to pulling out the plastic to pay for ordinary expenses. 

         So how do you take control of a runaway train?

The first thing you have to do, is realize it is getting ahead of you.  As the minimum payments do not address principal they only offset interest, making minimum payments is a losing proposition. A $5,000 debt can take 22 years to pay off and a borrower will pay an additional $5700 in interest at a 15% rate.  If you miss a payment, or are repeatedly late in making the payments the rate can be reset to a "Default Rate" which can be as high as 32.79% 

If you find yourself struggling, the first thing you need to do is head to your local bank.  Sit with a loan officer and review your finances.  You may be surprised to hear that you may qualify for a debt consolidation loan at a fraction of what you are paying on multiple credit card lines and that the interest on the loan may be tax deductible. A fixed rate loan would allow you to make multiple payments or directly reduce your principle balance directly which reduces the amount of time you will carry the loan. 

Credit cards on revolving payments do not work this way. Interest on credit cards is compounding. So in effect you could end up paying interest on the interest.  The next thing you must do is pull out a pair of scissors!

 The "ART" to being debt free, begins with discipline. If you have consolidated the debt, the best thing you can do is eliminate the temptation to charge again.

Avoid Unnecessary spending. 

Putting your payments into a manageable budget, will allow you to establish a "cushion fund" with the monthly savings. If you continue to compound the cushion fund, the payments will always be there and you could reduce the balance owed by prepaying or reducing the amount of time you will carry the loan.

Requesting a Pay-Off figure and "Firing" your credit card company is empowering. Yes, you still owe the debt, however you are no longer an" indentured servant" to them. In a recent survey of local lenders, the majority of loan crossing their desks are refinancing applications.   Local lenders are offering debt consolidation assistance.

This will allow you to focus on building your business.

Good Luck and Sell Well!