Why Should I Pay off Debt?

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) December 4, 2009 -- When the stock market was up and gas prices were down, living with debt was not only the norm, it seemed like a great idea. Buy what you want, pay for it later in small increments. What could go wrong? Americans as a whole racked up $800 billion in credit card bills, and even more in car loans, student loans, signature loans, and mortgages. Why not continue living in minimum payment mode? Here are some real reasons why you should pay off debt now:

When the stock market experienced historic lows recently; many Americans saw exactly why carrying a large balance is dangerous. As paychecks shrank and retirement and college funds evaporated, the once-manageable bills they were dealing with became unbearable. When you are struggling to pay your mortgage, it is easy to skip a payment on your credit card. You fall further and further behind. Living without excessive bills gives you a cushion in case your financial circumstances change. For instance, if you currently pay $200 in credit card bills each month, that is $200 that you could use for emergencies or for your saving account. If your car needs repairs or you need to buy pay for a tank of heating oil, you have the reserves to do so. You won’t have to dig deeper into debt.

Debt begets debt. When you are in a situation like the one above, you start accruing fees and charges that changes your monthly balances into a serious burden. You miss a payment, so you have a fee. This fee puts you over your balance, which results in yet another fee. You can’t make the next payment, so you accrue yet more fees. It is an extremely difficult cycle to get out of. You may take a consolidation loan to pay off credit cards, or even borrow against the equity in your home. But then you start using the credit cards again, and now you have those payments and a loan payment.

Recent legislation has allowed credit card companies to increase your minimum monthly payment from two percent of your balance to four percent. That $200 becomes $400, while your paycheck has assuredly not doubled. This is said to benefit consumers because they pay off balances in less time. But does it really benefit you when you start missing payments?

Paying off your bills also increases your credit score, which in turn gives you access to better credit. Those with poor credit often cannot get loans (especially now), while those with good scores can get loans with lower interest rates and more favorable conditions. This can mean the difference of thousands of dollars when you purchase a car or a home - or even whether you get that car or home at all.

Do you need another reason to resolve your debt? How about the feeling of being free? When you have huge balances, you feel like you can’t breathe. You wonder how you will buy necessities and pay your bills and work on your debt. Creditors may call you or send you threatening letters; you may worry constantly about legal action being taken against you. When you are actively working on eliminating the problem and have a solid plan in place, this worry lessens. With each payment, and with each dollar that your credit card balance decreases, you feel lighter.

Despite the helplessness that accompanies debt, it is not impossible to find an answer that will work for you and for your family. The worst thing to do is nothing. Work on becoming debt free today.

Learn about debt settlement, debt consolidation, debt relief, and more at Impact Debt Settlement.

More information can be found online at http://www.impactdebtsettlement.com/

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