Interest How Interest Impacts Fixing Credit?
Why would anyone choose to pay higher compound interest on a credit card for longer than they had to? The fact is, many people see their interest rate and don’t even question it.If there is an increase in their APR, they accept it as part of the credit game and pay it without a second thought. But why?
It turns out that much like receiving a credit card pre-approval letter in the first place most people neglect to read the fine print when they get their monthly statement. For some, it’s the “out of sight, out of mind” mentality. Soon, though, the card holder will find himself in a mad-panic approach to fixing credit that may be a case of too little, too late.
After the compound interest rates increase and the card holder is literally negotiating the selling of her firstborn to appease the creditor, it’s time to go to the credit cleaners to see if there is anything they can do. In a hope they can clean your credit report, the firm will usually ask for a monthly fee that can run into the hundreds of dollars, only paying a small percentage of the compound interest that has accrued since they opened their card.
The fact is, paying the minimum monthly payment has absolutely no impact of the actual balance of your card, and credit counseling services pay only a small percentage higher than the minimum payment; in essence, stringing you along for years as the interest rates on the card continues to sprout leaves of charges that make paying off your credit card take longer, and helps your pocket-book remain light as a feather.
Fixing credit is not a short-term struggle…
It does take years to clean your credit report and once again live with strong credit. Being able to take out loans for cars, or your children’s education, are vital in today’s world. But when you’re paying hundreds of dollars to simply meet your minimum due, it’s a battle that cannot, and will not be won.
Therefore, when paying off your credit card bills, or working with credit counselors, you must be forthcoming about what you can afford to pay each month because it’s imperative you make a monthly payment at least 15% greater than the minimum payment due.
By working with a firm that can help you maintain the upper-hand when paying off your credit card debt, as well as remain fed, clothed, and sheltered, you will see a startling difference in your credit report. Where it was once in the 600s, you will find, after only a few months, a stronger credit score. This is due to the fact that anyone who is worth their weight in gold knows that you cannot pay for debt by going into greater debt.
Put yourself on a budgetary diet…
The feasible way around this is to pay a higher monthly credit card payment while “trimming the fat” so to speak. In other words, getting out of debt and cleaning your credit report should be a priority. But so are essentials of life, such as eating and wearing clothes. Therefore, when choosing a company to help you dig your way out of debt, it is important to remember two things.
First, never get in bed with a viper, because they will, without a doubt, bite you. If you see yourself relying on credit excessively, chances are, you probably are. When in doubt about what to use your credit card on, if it’s not a necessity, then it would probably be wise to put the item down and move on. Secondly, if you have the chance between paying a slightly higher monthly payment and being debt-free in five years, as opposed to paying the minimum payment and being debt-free in ten, choose the 5-year plan.
Becoming debt-free might take a little extra scrimping on your part, but clean your credit report is worth it.
Fast Credit Repair
For a lower monthly payment, credit cleaners like Lexington Law will work with you to achieve a debt free status. By resolving inconsistencies and irregularities with your credit, their fixing credit solutions will improve your financial stability.