Good Debt and Bad Debt

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Debt settlement and debt consolidation - What is the difference
The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically debt settlement can settle your debts for 40-60% of your current balances. This will save you sizable amounts of money on debt principal and interest. It also provides you with the opportunity to pay-off your debts faster.

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Getting Rid of Student Debt
Higher Interest Rate Debt Must Go First

Whether to pay off or make investments is a question that needs to be answered at a later time, once the student has prioritized his loan payment schedule. The loans with high interest must be settled first. Most noted Debt Consolidation and Management experts agree that one must first make provisions to pay off debts with the highest after tax i... Read debt consolidation 1 article



Good Debt and Bad Debt
Been there done that, everyone is going to have some debt at one point or another. Some of us are under a mountain of it and others are on top of that mountain. Learning how to climb and conquer the mountain of debt is something I have done and taught others how to do. In this article I am going to touch on the two big types of debt.

The type of debt we are all familiar with is consumer debt, the type of debt that happens when we hit the mall and don't come out till the credit cards have melted. Wow we feel great we got so much cool stuff. It was on sale, I have always wanted one, the Joneses have last year's model and I got the newest thing out there.

If this sounds familiar you really know what consumer debt is. It has destroyed more lives that likely anything else out there. The amount of fights at the kitchen table between spouses over, where did all our money go is causing a lot of divorces. This kind of debt does not get us anywhere towards financial freedom. There comes a time when most folks realize that one more pair of shoes is really not going to make them feel better. I thought it would and I have tried it with several colors of shoes and styles but I still feel like crap. Retail therapy gives a very quick high but has long lasting devastating effects on your wealth and health.

There is another kind of debt out there, investment debt. This covers anything that legitimately is making you money or increasing in value. This is good debt. Yes there is such a thing as good debt. Your house is the easiest example, you bought your house in 1970 and unless you are really unlucky and bought in some place they found nuclear poisoning, your house has gone up in value. Should you borrow to invest? Ouch, that is a prickly question. Even when something looks like an absolutely-can't go wrong investment, there is always the element of risk. To be safe, stick with investments with a long track record of gaining in value. Let the rule of thumb be that if you can't afford to lose the money, you can't afford the investment.

Take a look at all your debt and separate them into these two categories. Decrease the consumer debt and increase the investment debt and you'll soon be standing on solid financial ground. Be smart, be wealthy.

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How to Manage Your Credit Cards and Debts

One important thing that many people fail to understand is that a credit card is not cash. This is why many are deep in debt. They treat credit cards as money and use them indiscriminately. When used wisely and in moderation, though, credit cards become a very useful and helpful tool in managing finances.

Whether you're a new credit card holder who is sorely tempted to take your credit card on a buying spree, someone who has been in credit card debt before and managed to get out of debt, or someone in between, here are some tips that can help you manage your credit card so you can avoid the pains that come with financial death.

Tip #1: Plan your credit card purchases.

Planning your credit card purchases is one of the important steps you can take towards managing your credit card debts. Before using your credit card on a purchase, ask yourself how you will pay for it when the credit card bill comes. It's also important that you assess the items you intend to purchase -- is an item something you need or just something you want? If it's the latter, you may just be experiencing an impulse to buy something. Keep your credit card in your wallet and walk away. By using your credit cards only on planned and needed purchases, you will save yourself long-term grief caused by mile-high credit card debts.

Tip #2: Spend within your credit card limit.

Manage your credit card debts and payment by spending within your credit limit. It's wise to know how much credit you have left in your credit card before purchasing anything. It's also wise to not go over two-thirds of your credit card limit.

Tip #3: Keep credit card statements.

Don't throw away your credit card statements. If you receive electronic credit card statements, print them out and keep your records together for future reference. Keep in mind that credit card fraud is rampant and this is one reason many people are in debt -- they are in debt for purchases they never made. If there are any transactions you do not recognize, report it to your credit card company right away. It also pays to make a list of credit card purchases you make each month. This way, you can compare your list with the credit card statement. Again, if your list and the credit card statement do not match, contact your credit card company as soon as possible.

Tip #4: Know how much you need to pay and when.

Save yourself finance charges and late payments by knowing how much you need to pay and when you need to pay. Unless you have a low interest rate on your purchases, try to pay off all your credit card debts each month. Most credit card companies give you at least two weeks to send payment. If you're paying with a check, mail your payment a week before it's due. If your credit card statement is late, call the number on the back of your credit card and find out how much your debt is and what the minimum payment is. As soon as you find out this information, send the payment right away.

Tip #5: Consider debt consolidation

Look into debt consolidation options, which can make it much easier for you to pay off your credit card debts. It's also wise to seek the help of a financial adviser, especially if your financial problems are already too difficult for you to solve on your own. Financial advisers could help you in managing your credit card debts. Some advice they might give you is to seek financial assistance through bank loans. However, before going ahead with a debt consolidation agency, do your due diligence on the company. Research about the agency and know its background. You want to receive the most sound financial advice so you can get out of credit card debt.

Of course, the best way to stay out of credit card debt is to minimize using your credit cards. In this case, self-control is an important trait to have. However, if you already have credit card debts that you want to pay off, follow the tips we've outlined in this article.

I struggled with debt for years before finally pulling myself out and achieving financial stability. For free information to help you achieve the same thing, visit:

Credit Card Debt Consolidation Loan Services and Information Online




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Good Debt and Bad Debt
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