Tag: debt

so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace

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More college students fin card debt. A report by AI percent of college studen cards. That's up 12% from based on a survey of more Forty percent of college debt of at least $1,000. more than $5,000. .

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[upbeat music] [Female voice] No one likes being in debt, but sometimes, well, you have to borrow money in order to invest in something big for your
future like your college degree or a house like Hector. Hector knew it was
important for him to make a plan to pay his existing debt in tandem with a good
spending plan that would help him avoid unnecessary debt. What is debt? Well
simply speaking, debt is an amount of money you borrow that must be paid back. Whether it's borrowed with a loan or through a credit card, it is money that
has to be paid back and usually with interest and fees. Hector learned that
there are two kinds of debt. There is bad debt like car loans and credit card debt
and good debt such as a student loan, a home mortgage, and business loans. An easy
way to think about this if that good debt is an investment in something that
will increase in value.

For example, student loans are an investment in
yourself, and if used wisely, can be a great tool to help pay for a
degree that will increase your earning potential and quality of life. When his
loans go into repayment, he will need to make his payments on time and in full to
ensure his loans remain in good standing. If he doesn't, there could be serious
consequences for his credit and overall financial well-being. Bad debt is when
you borrow money for something that does not increase in value. Unfortunately, you
may not always be able to avoid bad debt. For example, most people don't have the
resources to pay cash for a car. However, you should always be cautious about how
much bad debt you take on, and there are other ways that debt may get away from
you, resulting in debt distress. Hector had many of the signs of debt
distress like only making minimum payments, using his credit cards to pay
living expenses, and even paying his bills with his savings.
Fortunately for Hector, he discovered there is a smart way to borrow. While he
was a student, Hector created a spending plan to see
how much he needed to pay for his basic educational expenses.

Even though he was
offered more in loans, he only borrowed what he needed based on his spending
plan. Hector also made use of loan calculators
to determine how long until his loan is paid off, what would happen if he made
extra payments, and even how long it will take him to pay off his credit cards. One
way to pay his debts was to plan a month at a time and prioritize the debts. He
could do this by starting with either the debt that has the highest balance or
the highest interest rate. Instead, Hector chose to use the snowballing approach. He
listed his debts from smallest to largest and paying the minimum balance
on all of his debts while paying more on the smallest one. When he finished paying
off the smallest debt, he then put that payment amount towards the next smallest
debt until he paid that one off.

Then he repeated the process until they were gone.
Hector knew not to get impatient and go for the quick fix. He made sure to avoid
the temptation to use pawnshops, payday loans, or title loans to try to resolve
his debt. Instead, he made a plan. In addition to creating and using a
spending plan, he prioritized his debt repayments, prioritized his basic
expenses, and worked his debt repayment into cost on his spending plan. Hector also looked for assistance by
speaking to the folks from the Bears for Financial Success program on campus. Now,
Hector controls his money, his debt, and his future. And with a solid spending
plan and debt repayment plan in place, you too can become an empowered
financial decision maker like Hector..

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Hi! It's LaTisha from YoungFinances.com today
I'm going to talk a little bit more about how paid off my $22,000 worth of credit card
debt. I've had a couple of people ask me about the credit counseling service that I used
to help me pay off that debt and so I wanted to answer those questions today. The first question was how did I find them?
I know that there may be some credit counseling services out there that are not very reputable.
There are some that I've heard horror stories so I can completely understand this question.
A friend of mine introduced me to the service. They had great success with it and they
were able to pay off their debt within three years. The service that I used Is based out
of Atlanta. It's a consumer credit counseling service the name of the service is called
Clearpoint. That's the service I used to help me pay off all of my debt. Someone else asked
me, how much did it cost? I had to pay a monthly fee it was a small monthly fee.

I think one
month I paid $35 and then as my payments went down each month than I paid a smaller and smaller
monthly service fee to Clearpoint. So that actually goes hand-in-hand with the next question
which is what with my monthly bill? My monthly bill started off pretty high. I had a lot
of debt that I added to it. I had $26,000 of debt that I added to the debt management
plan. So what they do is they set you up with a debt management plan and help you to figure
out how to pay down your debt and pay off your debt within a certain timeframe whatever
timeframe that you want to do. Typically it's three years and I opted for three years. So what happened was when they were setting up my debt management plan I put all of my
debt on there like I said it was about $26,000 I realized I had doubled up on one creditor
because one of them was already in collections I had two people collecting on the same debt
so once I removed that debt it came down to about 22,000 and then I wanted to pay everything
off in three years so I wanted to make sure that after three years I was completely done
so we worked on a payment that was comfortable and something I was able to make along with making the rest of my payments that I had to make on my budget but something that
would also help me to pay off all the debt within three years.

So the payment that was
settled on at the beginning was $800 and I paid it every paycheck I paid $400 then after
a while it even things started to get a little bit tighter for me where I felt like I wasn't
able to really manage that so all I did was I gave them a call and let them know that
my budget has changed a little bit would they be willing to help me negotiate down to $600
a month and so we were able to work together to figure out how I could do that. I was able
to work with them and they help you create a budget.

That's one thing that they helped
me to do was create a budget to see what I could pay and how I can do this and really
get rid of my debt within three years that was very helpful. And then the last question
is what was the biggest advantage of working with Clearpoint? One of the biggest advantages
is that they contacted all of my creditors and negotiated my interest rates down. In
most cases they were able to negotiate the high interest rates that I had of 22% to 24% and
they were able to negotiate that down to 0% for a lot of my creditors they were also able
to help me remove some of the fees and get fee concessions for me. My debt was pretty
delinquent at the time so they were able to call and negotiate.

So they did all of the
negotiations for me in that instance whereas I might have been able to get some of that down but
and they were really good at that so that helped a lot. It really helped me to pay all of
that debt within three years. Another thing that they did was they were the contact person
for all of my creditors. If I had creditors calling and some of them I it were in
collections all I did was say "hey I'm working with a credit counseling service
and you can contact them if you have any questions or if you want to know what payments are available
to be made because they are handling it all." I don't know what it is not think of something
in the industry where if you're working with a credit counseling service the creditors
they just don't bother you they will call the credit counseling service.

So they called
the credit counseling service and Clearpoint was able to talk to them. I didn't have to worry
about being scared my phone ringing all the time and figuring out "Should pick it up or
not?" Because at the time and I had a lot of debt it was a point where it was very stressful
and I talked about that in the blog post on how I paid off my $22,000 of debt. It was very
stressful. Yeah so that was the biggest advantage them being able to save me a ton of money
on fees, they saving money on interest rates and they were able to contact and talk to
my creditors and be that liaison. So that's my experience with Clearpoint as a credit counseling
service like I said I used them to help me pay off my $22,000 worth of debt.

If you have debt and you
have more questions on how you can pay off debt, your options and maybe more questions
about debt feel free to contact me at YoungFinances.com or you can leave a comment in the box below
just fill it up with any and all of your questions and I will be sure to either answer them in
the comment section or create a video response for you. Make sure you head over to YoungFinances.com
where I've got more information on debt, building credit and getting your finances on the right
track so that you can become a financial success. And finally if you liked this video and it
gave you some good information, give it a thumbs-up! I really appreciate all the support from
you guys and hope to see you next time.

Ok bye..

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A balanced approach to wealth management serves 
both today’s needs and tomorrow’s goals. For some,   that may mean paying off some debt today while 
simultaneously investing for the future.
  Of course, your own needs and circumstances 
will be unique. But hopefully, this video   can help you evaluate alternatives and find an 
approach that fits your situation and goals. If you have some extra cash flow each month, you 
might be wondering what the best thing to do with   it is: should you pay off debt, or should you 
instead invest? The answer can be complex, and   it varies depending on your financial situation. 
So, it’s crucial to consider where you are   financially, the rates of return you could expect 
with each option, and a variety of other factors.

So before you start putting money away toward 
either option, it’s essential to make sure you   have your financial basics covered. And 
the best way of doing this is to create a   budget if you don’t have one already so you 
can see how your monthly income is spent. Since your finances are finite. You, therefore,   have a limited amount of money to pay down 
debt, invest and cover your expenses. This   is why it’s important to learn what 
comes in and goes out each month. If you stick to your budget, you’ll have 
better control of your personal finances.   This will allow you to dedicate as much 
cash as possible towards each ‘category’,   thus increasing your net worth whilst 
building a solid financial plan.

Once you determine the amount you’re able to 
set aside for paying off debt or investing,   you’ll need to prioritise your options.  Investing is a way to set money aside for the 
future in an investment vehicle. Examples of   this include bonds, stocks or mutual funds. The 
great news is that, the value of these vehicles   will grow with time. On the other hand, debt 
represents money that you’ve spent already and   that your lender is charging you interest on. 
When this debt is left unpaid, it only grows   with interest charges adding to your balance 
and incurring interest charges on their own. In the case of investing, this is the rule 
of thumb: if you can earn more interest on   your money by investing it than your debts 
are costing you, then investing makes sense.   Another thing to consider is your risk 
tolerance. If you are comfortable taking   the gamble that your investments will depend on 
the rise and fall of the markets, then investing   is a better option as opposed to someone who’d 
be restless wondering how the market will be. When it comes to paying down debt, 
there are several good arguments   for opting to pay down debt rather than 
investing.

For one, your debt carries   a relatively high-interest rate. This is 
especially the case with credit card debt.   Another reason to pay down debt is your credit 
score, which is important if you’d like to borrow   money for a mortgage or get a loan on a car. 
If you have a low credit score you’re likely   to pay higher interest rates (that is if you 
can get a loan at all). Your credit score can   also affect other areas of your life. Some 
examples include the premiums you’ll pay for   insurance, whether you’ll be able to rent 
a place, or if an employer will hire you. Paying off debt – especially if you have lots   of it – can be the right way 
to go for that reason alone. Psychology is also a factor that comes into 
play. If your debts are making you lose sleep,   then you’d rather repay them even if you might 
get a better return on your money by investing.

When you think about it, paying down debt or 
investing doesn’t have to be an “either – or”   decision. Why not do both? Investing and 
paying off debt are essential financial goals. Your investments and your debt 
are elements of your net worth.   While your assets increase your net worth, 
your debts are dragging it down. Since your   focus should be increasing your net worth, you 
should aim to increase your assets and minimise   your debt at the same time. To do this, commit 
as much of your cash flow to fulfilling these   goals as possible, ideally all of your free cash 
flow after you factor in your necessary expenses. If you have high-interest rate credit card 
debt, focus on paying it off first.

If you   are investing when you have credit card debt, 
you are likely paying a higher rate on your   debt than you are earning via your investments. 
Unless you have a huge amount in investments,   you end up losing money overall. Some debts 
tend to be lower however, such as mortgages   and student loans which you don’t need to be as 
aggressive with those as with high-interest debts. How to start investing Investing your money is important to 
building wealth. But you need to make   certain you’re ready before you start 
using your cash to buy investments.   If you have a lot of credit card debt, you 
may not be in a position to invest much.

When you have a limited amount of money, you 
have to decide how best to use it to maximise   the return on investment it provides. In most 
cases, paying off credit card debt is going to   provide a better return on investment than just 
about anything else you could do with the money. The one exception to this is if your employer 
provides a 401(k)-matching contribution when   you invest in your workplace retirement plan. 
If your employer matches contributions you make,   that’s free money. The specific return 
you get will depend on the percentage   of contributions the company matches, but it’s 
common for employers to match 50% or a 100% of   contributions up to a certain percentage of your 
salary.

So, investing enough to earn the full   employer match could end up giving you a return on 
investment of around fifty to a hundred percent. Investing in your retirement account is often a 
good place to start. Experts recommend putting   at least 15% of your annual income towards 
your retirement. Whether you do this through   a work-sponsored retirement plan or an individual 
retirement account is up to you, but make sure   you’re never leaving any money on the table, such 
as from an untapped employer match to your 401(k). Retirement aside, the right investments 
for you will depend on your risk tolerance.   Stocks are generally riskier 
than bonds. To lighten the risk,   you can turn to mutual funds. They can 
help provide diversification among stocks,   bonds and other investments to reduce the 
risk from each one individually. Your risk   tolerance can be factored by income, age, 
lifestyle and when you’ll need the money. Carrying debt can be stressful, and if 
it negatively impacts your mental health,   you may want to prioritise paying debt 
down first. Debt can completely derail   your financial goals. It eats through 
your savings and can offset the gains   you make through investing.

On the other 
hand, you may have a better chance of   a bigger reward with smart investments, 
so you may decide that’s worth the risk. Keep in mind that investing doesn’t come 
with guaranteed growth. Any average or   likely rates of return you may see are 
often based on long-term performance;   you may experience higher highs, 
and lower lows in the short term. If you choose to invest, by no means should 
you stop paying off your debt entirely. You   should aim to at least make your minimum 
monthly payments before you put any spare   cash toward investments. You really don’t 
want to miss your minimum payments. Think   of your minimum debt payments as fixed 
expenses. After regular living expenses,   minimum debt payments should be the 
next priority.

Failing to do so,   could lower your credit card score making 
it harder to qualify for future loans. The younger you are when you start investing, 
the more time you have for your investments   to grow. However, there’s no guarantee 
that you’ll make money when you invest,   as the market can be volatile. If 
you’re relying on an increased balance   within a short amount of time, you might be 
disappointed.

Whichever decision you make,   your decision is never set in stone. You can 
always switch up your budget if your financial   situation changes or if you’re unsatisfied 
with how you’re currently allocating your   money. The important thing is that you’re 
taking charge of your financial future. Make sure you have an emergency fund 
in place before you use extra money to   contribute to these goals. An emergency fund 
should contain between three to six months’   worth of expenses that can protect 
you in case unexpected costs come up. Without a financial safety net, you’re one 
unexpected medical bill, car accident or surprise   expense away from even more debt. Some people, 
particularly those worried about income loss,   prefer building a large cushion of cash for 
emergencies first over paying down extra debt. By using automatic deposits, you can create 
an investment plan and stick to it over time,   treating your investments as part of your 
fixed budget. Your safety net will give you   some financial breathing room, and before you know 
it, you’ll be making progress toward retirement,   a down payment on a house, college for 
your kids or whatever goal you had in mind.

As you approach saving, investing and paying 
off debt, keep in mind that it doesn’t have to   be all or nothing. You don’t just have to focus 
on one thing at a time. If you do, it could end   up taking longer to start working on each of 
your goals, which could delay your success. The best path to long term financial 
sustainability is paying off debt and   investing at the same time. This approach will 
help you improve your financial discipline,   and will ensure that all of your hard-earned cash   takes you one step closer to achieving 
your financial goals one cent at a time. Try and find a balance between everything.

While 
it can take a little longer to achieve each goal   this way, it can give you a more well-rounded 
financial foundation and pay off in the long run. When making decisions about 
debt reduction and investing,   keep in mind that the need to 
eventually pay off principal   is certain, but investment returns are not. 
Investment performance will vary over time,   and it’s possible to experience losses as well 
as gains. At the same time, it’s well known that   investors who start earlier can benefit 
from compounding and time in the market. But there aren’t any magic numbers. That’s 
why it’s important to work with your financial   advisor to create an investment strategy that 
fits your financial expectation for the future. Having some extra cash is an enviable situation 
to be in. When making decisions about debt and   investing, be a long-term thinker: Think 
about the position you want to be in the   next ten or so years.

Then evaluate what 
actions today will be most effective in   helping you achieve your long-term 
financial goals. Whether to invest   or pay down your debts is a decision only you 
can make. Whichever you choose is better than   merely spending it. You’ll be in a better 
financial situation than you were in before. If you’re interested in getting my savings 
and budgeting guide or retirement guide,   click on the link in the descriptions. Well, thank you all so much for watching, if you 
found this video helpful, be sure to give it a   thumbs up and subscribe to our channel for 
more tips on how to improve your finances. Until next time, take care!.

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>>> IT IS FOR:00 P.M. THE NEW YORK STOCK EXCHANGE HAVE ANOTHER DAY OF TRADING, GOING UP ABOUT 550 POINTS. THE S&P 500 UP ABOUT 2 1/2% WITH THE NASDAQ IS UP ABOUT 3 1/4%. ONE LINGERING ECONOMIC CONCERN IS THE RISE IN CREDIT CARD DEBT. THE FEDERAL RESERVE BANK OF NEW YORK SAYS AMERICAN CREDIT CARD DEBT ROSE TO $887 BILLION IN THE SECOND QUARTER OF THIS YEAR. OUR NEXT GUEST RIGHTS IN THE WASHINGTON POST, CREDIT CAR BARS FACE MOUNTING BURDENS AND TO BREAK IT ALL DOWN SHE JOINS ME NOW. AN ECONOMIC CORRESPONDENT FOR THE WASHINGTON POST. WHAT IS DRIVING AMERICANS TO BORROW MORE ON CREDIT CARDS? >> IN A WORD, INFLATION. WE HAVE TO GO BACK A COUPLE YEARS TO GET THE FULL PICTURE. MANY FAMILIES HAD EXTRA MONEY EARLY ON IN THE PANDEMIC TO PAY DOWN BILLS.

WE SAW AMERICANS PAY DOWN BILLIONS IN CREDIT CARD DEBT. THEY HAD EXTRA SAVINGS, GOVERNMENT STIMULUS MONEY. INFLATION HAS GOTTEN WORSE AND THAT HAS REVERSED. WE ARE STARTING TO SEE PEOPLE CHARGING MORE ON THE CREDIT CARDS AND OWING MORE THAN USUAL. >> ONE CONCERN WE'VE HAD IS TALK OF RECESSION. HOW COULD MOUNTING DEBT MAKE IT WORSE IN TERMS OF AN ECONOMIC SLOWDOWN FOR EVERYBODY? >> WE ARE IN THIS MOMENT WHERE THE ECONOMY IS STRONG. UNEMPLOYMENT IS VERY LOW. MANY PEOPLE STILL HAVE JOBS. THE FEAR IS IF THERE IS A SLOWDOWN, IF THERE ARE MANY JOB LOSSES WE COULD START TO SEE MAJOR DEFAULTS ON CREDIT CARD DEBT. >> HOW MUCH DO YOU THINK NATIONAL RENT-A-CAR DEBT FACTORS INTO THE FED DECISION IN THE NEXT MONTH OR SO AS WE EXPECT THEY WILL CONTINUE RAISING INTEREST RATES? DOES IT PLAY A ROLE IN THAT? >> IT DOESN'T PLAY A ROLE, BUT THE DECISION TO RAISE INTEREST RATES WILL CONTINUE TO IMPACT PEOPLE WITH CREDIT CARD DEBT. THAT MEANS INTEREST RATES ARE RISING AND THEY OWN MORE AS A RESULT.

>> WELL, WE ARE VERY GRATEFUL. IT IS GOOD TO LOOK AHEAD AND TO KNOW WE CAN EXPECT THINGS TO GET WORSE. IF YOU CAN.

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– $100,000 of credit card debt. Can you even imagine
having that much debt? Maybe you do have that
much credit card debt. In this video, we're going to talk about how to solve that problem of large amounts of credit card debt. But first, if this is your first time here on my YouTube channel, please
go ahead and subscribe. On a weekly basis I
provide different content on how to deal with really
serious and big problems whether it's bankruptcy, whether it's debt collection lawsuits, or whether it's dealing with large amounts of credit card debt, which is what we're going
to talk about today. Now to put this into perspective, $100,000 of credit card debt. If you're paying the
average interest rate. And nationwide, this is
according to WalletHub, they say the average interest rate in the United States right
now is 19.02% interest. Which seems kind of high, but
that's what the average is across the board on new credit cards, 19%. If you have $100,000 of credit card debt, you're monthly minimum payment
is going to be $4,000 a month. So you can see how this
could really quickly get out of control.

Now you may be asking yourself, how does anyone get $100,000
of credit card debt? Let me tell you in my
law practice what I see, how this typically happens. The first one is business debt. Business credit cards are
a little easier to get, at least in high amounts. They may be lines of
credit, or lines of credit that have rolled over into a
credit card type situation. Where we see that they'll get multiple. You know, it's usually not just one card, but there'll be four or five cards with 15, $20,000 of credit on it. And those get racked up, the
business doesn't do well, the business fails. You know, worldwide pandemic happens. And all of a sudden you can't pay your monthly credit card payments. All of a sudden that
becomes a big problem. The second area I see is medical debt. A lot of people put their
medical expenses on credit cards.

Either because they have high deductibles, which most insurance policies nowadays do have very high deductibles. Or they don't have insurance at all so they put those medical
services on a credit card, and then they're unable to pay them. The third area that I see this is where people are consistently supplementing their monthly
income with credit cards. So if someone, their
salary is $4,000 a month. They're consistently
putting $500 to $1,000 on the credit card. And over time it starts to build up and with interest the whole
thing just starts to snowball. So it may sound like,
hey $100,000 in debt, that's really got to be the exception. It's more common than you think, particularly in my line of
business, I do bankruptcy law. I see people routinely
that have 50,000 plus and a number of those
people get over 100,000. Sometimes up to $150,000
of credit card debt. So the question is, what
do you do if you have large amounts of credit card debt, how do you solve that problem? Really you have three options. Your first option is
to simply pay it back. This is done through usually something like the Dave Ramsey snowball method.

Something that a lot of people don't know is I'm actually a certified
master financial coach through the Dave Ramsey Organization. Which I know is kind of weird because I'm also a bankruptcy attorney. But I believe in that type of method. If it's something where you have the means to be able to pay back
your debts over time, using Dave Ramsey's snowball method of starting with the lowest balance and start paying that off, and then taking the monthly
minimum that you paid on each card that you pay off and
applying it to the next one as you go over time. That's a great method
for getting rid of debt. It requires an incredible
amount of discipline and it requires a regular, monthly income that can actually pay that debt off. That's where I see a
lot of people struggle, is they simply don't
have the monthly income.

Particularly right now as we're dealing with this coronavirus,
COVID-19 thing going on. A lot of people's income has
reduced, their hours are down. And so that makes that type
of approach pretty difficult. The second one is to settle the debts. Now debt settlement is generally a decent approach to
deal with these things. A lot of the big problems I see is if you have a lot of cards. If you have 50,000 or
100,000 in credit card debt and it's spread out over
10, 15 credit cards, it's going to be pretty difficult. Because you have to get
all of them on board in order for the settlement
to make much sense. If you don't get them all on board and you settle half of them
and the other half sue you, you're not in a much better situation. So if you have a low
number of credit cards, you know, two to four, maybe five cards and you have the ability to make offers.

Usually settlement is only effective if you have a lump sum to deal with. So if you have some cash
and you can pay anywhere from 20 to 50% of the total
amount that they're seeking, they may be willing to settle with you. It's important to note that settlement, at least good settlements,
usually only happen once the account goes
completely delinquent, either it's charged off or
even sold to a junk debt buyer, that's where you're going to
get the better settlements.

If you're current on
your payments right now and you call up your credit
card company and say, "Hey I'd like to pay half." They're going to tell
you pounce and you can pay the full amount, or they may give you
some kind of you know, forbearance, something like
that for a month or two. But they're not going to
give you the good deal until it goes negative or
til it goes delinquent. The problem with that obviously is it's going to impact your credit. So let's talk about the
third option, bankruptcy.

The B word. You know, most people don't
want to file for bankruptcy, but it's a very powerful tool for getting rid of credit card debt. If you find yourself in this situation. In the typical Chapter 7 bankruptcy, pretty much all credit
card debt is discharged. It's eliminated. It goes away completely,
there's not payback, there's no tax consequences to it. It just goes away and is discharged. So if you're dealing with large
amounts of credit card debt a Chapter 7's not a bad option of just getting it out completely. It's a relatively quick process, it takes about four to five months. The alternative is a Chapter 13. Chapter 13 is typically
when people don't qualify for a Chapter 7 because
their income is too high. I can't go into the specifics of income here in this video because those
numbers change all the time and it varies from state to state. But I can tell you this, they base it upon your
household size and your income. And depending on where you're at there, a bankruptcy lawyer
will help you determine if you're able to move
forward with a Chapter 7.

If not, you're looking at a Chapter 13 or you'll be required to pay
back a portion of that debt over a 60-month period. At the end of the 60 months if there's any balances still remaining, that would be discharged
or eliminated completely at that point. So those are really your three options. You can pay it, you can settle it, or you can file bankruptcy on it. The best thing obviously
is to try to avoid getting into that kind of debt. But that's not what I do on this website is help you avoid it,
I help you get out of the problems that you're already in. So I appreciate you watching today. If you want to learn
more about how to deal with large debts or some
of those different options, debt settlement, bankruptcy, or even that Dave Ramsey snowball. I have more videos on this site. Make sure you subscribe
and check those out. I know they can help you out. Thanks for watching today..

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