Ask Away Blog: How To Survive Credit Card Debt with Derby Advisors

How To Survive Credit Card Debt with Derby Advisors

Tuesday, October 1, 2019


Credit card debt is one of the most nagging burdens ever. Why? Because when you first start using a credit card, it can feel good….. You can get instant gratification by swiping your card and walking out of the store with your shopping bags. But overtime, the amount you have charged builds up. Then life happens. The money you want to use to pay down your debt gets used on something else, and you’re stressed out. So you charge more stuff...maybe it’s living expenses or maybe it’s just clothing or items that make you feel better. Before you know it, you’re facing an enormous amount of debt and you have no idea where to start when it comes to getting OUT of debt. If you already resonate with these first few sentences, you’re in luck, because I’m going to walk you through how to deal with credit card debt, what options you have with Derby Advisors, and how to avoid it in the future.



Where to start when dealing with credit card debt with Derby Advisors?

So, first you need to do a difficult thing, and that is knowing exactly how much you owe and to whom you owe it. This is the first step in dealing with  credit card debt and lets you move forward with a plan. So get out all of your statements or pull up all your online credit card accounts. Make a list of the current balances on each card or loan, write down the interest rate on each, and write down the minimum payment due on each one. This is important because:
  • You need to know what you owe
  • You need to know when your payments are due
  • You need to be able to estimate when you’ll be out of debt

So what is debt consolidation with Derby Advisors?

When you see what you owe, and you make a plan to pay everything off, you can decide which methods you’ll be using to become debt free, whether it’s paying them down over time, using debt consolidation, or vowing to never use credit cards again (for now, atleast). And if you’re wondering what debt consolidation is, it’s basically a second chance at becoming debt free. You can get a brand new SINGLE loan that has a new (often better) interest rate, a new payment amount each month, and a new payoff date.



How will I benefit by working with Derby Advisors?

So if you want to pay it off slowly over time, you should pay the minimum on payment on every debt, except the smallest one. That one you will pay the minimum but also any extra money you can come up with every month in an effort to pay it down quickly. As soon as you pay off that debt, you will move to the next debt, and you will pay it’s minimum payment, the minimum payment from the debt you just paid off, AND anything extra you can throw at it each month. You repeat this as you move up your list of debts. To add more to your payments each month you need to look at your budget expenses and see where you can save money on expenses and instead throw it at your debt.
Now, if you’re looking at a ton of debt, and no matter how you work the numbers, it seems like it will take a decade for you to pay off, this is where you should consider debt consolidation. You see, with debt consolidation you still pay it off with a plan. The debt consolidation loan allows you to get a payment plan with ONE due date rather than several due dates and several minimum payments each month. This can help you get out of debt at an earlier date and avoid high interest rates. Honestly, keeping track of multiple due dates and how much you pay on each and every loan or credit card can not only be exhausting but also overwhelming.Sometimes it's such a process that people can't even deal with it and they start missing payments. When you consolidate your debt you end up with one monthly payment you have to remember each month and you have an entire month to get that money together. You can even get a lower monthly payment if you choose a lower interest rate or a longer plan for paying back the loan, even if you know you can pay it off sooner.  A longer loan period can leave you with extra money each month that you need to pay your utilities and buy necessities like groceries and gas for your vehicle. Sometimes you can even choose your own payoff date with a debt consolidation loan. It’s important to remember that when you choose a debt consolidation loan, you have to be serious and commit to getting out of debt. This isn’t another fun loan to rack up debt with, obviously, so you will definitely need to curb your spending until you’re in a better financial situation. And you will also need to rethink how you view debt as a tool to get what you want. There are ways to plan better and save for things that will eventually be a large expense for you. That’s why it’s important to get your debt out of the way so you can actually thrive, live your life, and manage your money properly.


Remember that a debt consolidation loan can have an origination fee, which is typically 1-6% of the total loan amount and gets taken out of the loan funds before you even get them.  Make sure to take that into consideration and make sure the amount you borrow is enough to cover your debt AND the origination fee. 

If you never change your behavior that has brought you into debt, you'll never actually become debt free.  You need to take a serious analytical look at your money habits with both spending and saving and ensure you are doing the right things to stay OUT OF DEBT.  This means you can't get into any new debt! Make sure you get a on a budget and figure out a more responsible way to spend money each month.  You should have a system in place to track your spending and even your debt payoff progress.  It's WAY too easy to get into debt and it can be VERY difficult to get out of it.  

Make sure you speak to a professional to get more information and see what works best for your specific situation.   

Are you considering debt consolidation? 


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