Cutting California Credit Cards |
By Lacy Gallagher on November 9, 2011
.jpg.aspx?width=75&height=75) The cost of living in California is higher than the United States average and many people move out west to follow big dreams under the motto, “you have to spend money to make money.” Faced with this big spending California living, it is very common that west coasters, especially young Californians will turn to credit cards in fund their lives.
Using credit cards for basic necessities can quickly lead to an overwhelming amount of debt. Living on credit is a doomed strategy. When you live off money that you don’t have yet, once you have money it will already be owed to creditors causing continued reliance on credit cards, which creates a huge obstacle for generating wealth.
The sooner someone can cut the credit cards and begin paying of credit card debt, the better. For some this can be as simple as creating a budget that allots a significant amount to pay off the accumulated debt. For others, it may be less intimidating to combine all the separate credit cards debt under one loan. Debt consolidation loans are ideal for those who owe several creditors various amounts at multiple interest rates because all the credit cards can be paid off with the loan.
- That takes the stress out prioritizing which card to pay off first.
- This strategy also simplifies the process of creating your budget, because there will be one monthly payment towards paying off the debt consolidation loan. Financially this is a smart move as well.
- Credit cards tend to have high interest rates; it is very likely that a loan for debt consolidation would have a lower interest rate.
- Having one line of credit out is better for your credit score than owing several different credit card companies.
- You can use collateral when obtaining a debt consolidation loan, which can constitute for an even lower interest rate and provide you an extra incentive to make your monthly payment. The threat of losing your home may be more encouragement to pay each month than credit score damage.
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