Credit Debt Pitfalls

You don’t have to look far to see that everyone seems to want to loan you money, and then they want to help you consolidate all of your debts.  I’m sure you always heard the saying, the grass isn’t greener on the other side, and this is true in credit debt and credit debt repair techniques.  Many credit debt repair techniques aren’t helpful in any way and chances are they can affect your credit in a negative way just as badly as not paying your credit debts off anyway.

It is best to stay away from the low or no interest rate credit card offers.  There is a reason that a credit card is willing to send you these offers.  It isn’t because they think they are helping you, they expect you will miss a bill or two and then those rates go sky high, and believe me that is what they want.  They aren’t your friend, so remember this the next time you get a credit card offer like that.

Some companies focus on transfers, requesting that you transfer your current balance over to another credit card with a “lower” interest rate.  Generally, this “lower” rate is for a short period of time, and them WHAM, they hit you with a rate almost out of this world.  At this point, you can rest assured, if you were hurting to make payments, you will really be hurting even more soon enough. 

Just because a company advertises a sale doesn’t mean you are getting the sale.  Just think about it.  You might be saving five percent today, but if your credit card has a nine percent interest rate, then you are actually spending four percent more than if you had just paid in cash.  The only way around this is if you pay off the card, but that surely isn’t what they want.  They want you to keep holding the debt because they will make so much more without you paying everything off.

Car dealers aren’t exempt from this either.  Some car dealers make offers to help them get cars off of their lot.  The longer that vehicle sits on that lot, the less money the car dealer makes.  So they are willing to “cut” a deal.  Don’t worry; they aren’t losing anything from their “deal”.  They may say that they will help you pay off your old car, but they aren’t helping you to pay it off, they are just rolling it into the new car loan, so now your new loan is actually two car notes in one.  Just remember, if you try to unload the car note on someone else, they probably won’t want to pay for your other car you don’t have anymore.