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Follow on Google News | Non Profit Credit Counseling Debt HelpAvoid these money mistakes on the path to financial freedom. There are non profit counseling services out there that can help you.
By: Michael J Brazier The 401(k) Vault: Taking retirement money to satisfy current financial obligations has been one of the most unfortunate turn of events the nation has seen during this recession depression. Aggressive creditors and collection tactics create a sense of urgency to satisfy unsecured delinquent debts and people are seeking salvation by cashing out funds that were set aside to secure their future. Never take secured funds to eliminate an unsecured debt. There are many other positive solutions to absolving debt than taking away from your retirement plan. The Co-Sign Line: Co-signing is usually agreed upon between family members or loved ones looking to help each other out. While it’s always nice to lend a helping hand be sure you know and trust the person looking to have you co-sign. If they need a co-signer you know immediately their credit history is far from perfect. Remember, this is a business transaction and while it may be between family or a loved one, the basis remains the same – business transaction. Consider the fact you may wind up having to pay back their loan as a co-signer. If the debt isn’t paid your credit will be affected along with theirs. New Mafia: Around 19 million Americans have fallen victim to payday loans. These short term cash advances, usually utilized in an emergency situation, start small and end in disaster. Most Americans who fall into this debt trap have dipped into payday loan quick cash fixes more than once. Payday loan companies usually will increase the amount they’re willing to loan out as you build a positive payback history with them. This Mafioso industry applies outrageous annualized interest rates ranging from 391% to 521%. A $5000 payday loan could wind up costing you $20000 to pay back. Most of these companies boldly illustrate these outrageous rates on their applications. Once you’re in this hole it is extremely hard to get out of. An unregulated industry to date, not even a consolidation program can save you from the horrific pay back terms and fees when using a cash advance. Steer clear. Beg your parents or your employer for money before you jump in the water with these sharks. Solutions: Financial education and empowerment starts with a household budget. Knowing what you have coming in for income and what you have going out on a monthly basis is the starting blueprint to building your financial freedom. Outlining your debt to income ratio helps put your finances in perspective and can identify spending limits to avoid falling deeper into debt. Getting away from credit card use is near impossible in America with Visa being accepted in more places than cash. Having a debit card can also be helpful but harmful in same instance. Officials say the majority of overspending by consumers is commonly justified by the use of a debit card. A consolidation plan will close your credit cards so you cannot use them anymore. Leaving one out for emergencies, you can still consolidate your other credit card debts. The consolidation will provide one monthly payment and a major reduction in the interest along with the stopping of past due, late, and over limit charges. This allows the majority of the payments to go to the principle rather than the interest. Improve credit and get out of debt with nonprofit counseling services. Our BBB rated A+ budget counseling and debt consolidation plans can help you be debt free in 5 years without hurting your credit. For a free consultation speak to a certified credit counselor and see if a consolidation plan is right for you. Call 800.905.1563 or visit our website freedomdm.org and complete our contact request form. Haven’t the time to talk during the day? Use our LIVE CHAT feature on our website and get the answers you’re looking for. You can be debt free, Freedom Debt can help. Call us and see how you can be debt free. # # # Certified credit counselors work with potential clients to assess their current financial situation and determine what their best option may be. End
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