Carrying any type of debt can be hazardous to your long-term financial health. Here are six quick tips for dealing with debt, from Get a Financial Life by Beth Kobliner.
- Take any savings you have and pay off your high-rate credit card debt. Paying off a balance on a credit card that charges 14% is the equivalent of earning more than 14% interest on your money after taxes. This is the best investment you can make.
- If you have a decent credit history and you can’t pay off your high-rate credit card debt immediately, try to get a low-rate credit card and transfer your debt to it. You can find listing of low-rate cards on sites like www.credit.com, www.cardtrak.com, and www.lowcards.com.
- If you’re having trouble paying off your student loans, speak with your loan servicer to find a repayment plan that works better for you.
- Before you visit a car dealership, shop around to get an idea of current auto loan rates and car pricing information. Then, once you find the car you want, negotiate an exact price for a car with the dealer before you discuss the financing he has to offer.
- If you own a home, think twice before taking out a home equity line in order to pay off the loans you’re refinancing.
- Get free copies of your credit reports from www.annualcreditreport.com (877-322-8228) and buy your credit scores from www.myfico.com. If you’ve been a victim of identity theft, call the credit bureaus’ fraud department to have a fraud alert placed on your file.
ABOUT THE AUTHOR
Beth Kobliner, the author of Get a Financial Life (Copyright © 1996, 2000, 2009 by Beth Kobliner), is a contributor to the New York Times, and a former staff writer for Money magazine and a financial columnist for Glamour. She’s made multiple appearances on Oprah, Today, CNN, MSNBC, PBS, and NPR as a personal finance expert.
MORE ARTICLES BY THE AUTHOR
- Read Chapter 1 of Get a Financial Life
- Read the book’s Table of Contents
- “What Your Wallet Can Learn From Your Dentist,” an exclusive essay by Beth Kobliner