4 Simple Ways To Get Out Of Debt

When you’ve got a lot of debt, it could feel like there’s no viable way out. The truth is, the world just started to recover from a devastating financial recession a couple of years ago. So if you’re in this position, you’re not alone. Many hard working consumers were laid off from work. Tons of people, struggling to make ends meet used credit cards and took out loans to cover their expenses while they looked for work that was seemingly impossible to find. But now, more and more people are getting back on solid ground, only to be reminded of their debts every single day. Here are 3 ways that you can fight back, and finally dig your way out of debt!

Option #1: Good Budgeting

I’ve worked with a lot of clients on debt relief. One of the first things I noticed in the industry is that most of the problems can be fixed with better budgeting. Although it may take a little gumption at first to get things all set up, when you get a proper budget together, it will be much easier to manage your money, and finally pay off your debts.

One of the best ways to put a budget together is through the use of a spreadsheet. On your spreadsheet, you want to include all sources of income as well as all of your necessary expenses. Your expenses should include everything from rent to food, gas, daycare, and everything in between. Subtract your total expenses from your total income, now you’ve got your extra funds amount. Allocate as much money as you can to making extra payments on your debts while still holding a little back for monthly entertainment purposes.

Option #2: Sell Your Structured Settlement

If you’ve got a structured settlement, you may be in a very good position for paying your debt off. Although receiving small payments every 2 weeks or every month is enjoyable, you’ve got the option to get paid in one big lump sum.

With one big payment, you may be able to pay off your debts, and put money in savings for the future. Although this isn’t a perfect option for everyone, for some, it’s a great way to not only pay off debts, but to get ahead once again!

Option #3: Sign Up For Credit Card Hardship Programs

Because the worldwide financial recession caused so many people to fall into debt, many lenders started opening up hardship departments within their branches. These are departments designed to help you liquidate your balance as quickly as possible without spreading your budget too thin.

Those who qualify for financial hardship programs are generally given one of two options - either a long term financial hardship plan, or a short term financial hardship plan. In long term programs, interest rates are reduced and consumers are placed on a fixed monthly payment amount. This allows them to pay off their balances quickly without adding too much interest if any at all into the mix.

Final Thoughts

If you’re in a position of overwhelming debt, it’s important to realize that you’re not trapped. You’ve got tons of options! As a matter of fact, the 3 mentioned above are just the tip of the iceberg. All it takes is doing a little research and finding an option that’s right for you!

0 4 Hidden Credit Card Perks and Benefits that Consumers Should Know

Credit cards make us paranoid at times. We typically associate negative connotations to these plastic cards: never ending monthly payments, compounding interest, and a lifetime of debt among others. There are also perks and benefits credit cards offer, however, that can make us think the other way around.

Flexible Payments

Not everyday is shopping day, but if you have a credit card, you can practically buy what you can and pay just one-third of the amount owed next month. 

So, if you are buying the iPad Air, which costs around PHP 32,000, you have to pay the exact amount if you want to buy in cash. But if you have a credit card and you want to buy the iPad, you just have to swipe your card. If you buy an iPad air, your purchase will reflect in your next bill and you’re only required to pay at least the minimum amount of 3%: around PHP 1,000. 

Speaking of flexibility, you can take advantage of 0% monthly interest promos that most credit card companies in the Philippines offer. If you take advantage of a three-month 0% interest promo for your iPad Air, you just pay around PHP 11,000 for three months with no interest starting not today, but next month.

If the promo is for 12 months at 0% interest, you will only have to pay around PHP 2,600 per month starting next month. That’s a PHP 30,000 difference, and a lot better than paying in cash, because you can make use of your cash for other stuff or save it for an emergency fund.

Worry-Free Utility Bills Payment

This is one convenient feature of credit cards offered here in the Philippines, since most credit card holders pay utility bills. Paying these bills through your credit card will help you:

·   Avoid the long lines in payment centers

·   Pay ALL your bills through one statement

·   Organize and track your bills

Let’s say you live in the Metro: you have to pay Meralco, plus your Maynilad or Manila Water bill, plus your phone bills, among others. To make things worse, they have different due dates. If you use your credit card, you can set up an auto-pay facility to take care of your bills once they arrive, and then all you have to pay is your credit card statement. Better yet, you can also pay your credit card at home or wherever you are through online banking.

Supplementary Cards

If you have a big family, or you have a loved one who is far away, or if you’re teaching your teenager to manage finances, supplementary cards can be a good tool. Supplementary cards work like sharing your credit limit. If your credit card has a PHP50,000 credit limit, you share it with your supplementary card holders.

You can rely on supplementary cards during emergencies too. Let’s day your daughter – a first time driver – just had her first flat tire; she’s far away and doesn’t know what to do and where to go. If she has her supplementary card, emergency money is not a problem. Whatever she buys through her card will reflect on your bill as you are the primary card holder.

Balance Transfer

Sometimes, unfortunate events happen that make our already tight finances suffer even more. Sometimes it’s unavoidable to have debts and compounding interests on several credit cards that you own. Fortunately, you can consolidate your debt into one card through balance transfer.

Let’s say you have four credit cards from different banks, and you are paying 20% interest monthly. If you take advantage of a balance transfer, you can pick the bank that has the lowest interest and consolidate your debt into that bank’s credit card, and pay only for one interest per month. Contact your banks regarding this option and choose where to transfer all your debts.

These perks and benefits would not be to your advantage if you’re not financially responsible. It always depends on how you use or misuse your credit cards. If you’re an impulsive and reckless buyer, don’t expect to be debt-free!

About the Author:

This article was contributed by Mark Yasay of MoneyMax, Philippines leading comparison website. This portal helps individuals in saving money by comparing credit cards, personal loans, insurance and broadband plans.

0 Lessons from the Recent Recession

The Great Recession has created a big impact not just in America, but in nearly all nations across the globe. It has affected thousands: people lost their jobs, banks suddenly had plenty of money-lending problems, and the value of properties went down.
 

Which was—ironically enough—a piece of good news, especially for those planning to own or buy properties. If you’re one of them, do you know your options? 

Housingloans and credit cards are two of the easiest ways through which people can afford to buy a house or property they have a yen for. 

Real Estate in the Aftermath of the Recession  

For some, the recession has resulted to poor credit due to foreclosures, unemployment, and other related issues. For those who have their own residential properties, losing their jobs isn’t their only problem. Meeting the mortgage payments on their properties has brought more pressure and stress on them. And while some have resorted to selling off their properties during the Great Recession, this is hardly an ideal solution to the problem.

Because of many foreclosed homes, money lending companies now tend to be more cautious in giving financial aid to people who plan to purchase a residential property. 

The Good Side of the Great Recession

The recession taught people the importance of saving money. Between the years 2007 to 2008, the rate of household savings increased to at least two-fifths. Banks have an improved rate of persuasive saving. Even though recession brought decreased ratings in the stock market, devalued the market for residential properties, and increased the number of unemployment, there’s still a something good or positive that came out of it. People felt the urge to save money for their financial stability in the future. They tried to spend less to save more.

Having too many possessions is impractical—if you can’t afford them. So more people learned the value of recycling. Other women tried to spend less cash on their clothes, while some tried to minimise their weekly or monthly food costs. Impulsive buying habits were changed and personal finances were cautiously and carefully budgeted.

There are only a few of the positive things in the aftermath of the great recession. Also, since the value of homes went down, it was buying time for those who had the cash and wherewithal to spend. 

If you’re one of them, here are a few tips for you, especially if you’re looking to own property during the recession:

• Would-be buyers are on the hunt for Foreclosure properties because it’s a great opportunity to buy properties with sharp discounts. So make sure you remember to ask for that discount.

•  Make sure you choose a payment scheme that will sustain your financial standing.

• You need to save money that you can use as down payment.

•  If you want to apply for a house loan, make sure you have a good and clean credit report so you get to be approved immediately by most money lenders.

• Check the location and the condition of the house. Look for good buys rather than investing in a home-wreck.

Know that buying a house is a long-term investment so make sure you’re prepared for anything, six-ways-till-Sunday prepared. If you are, you just might get that home loan approved for that house or property you’ve been eyeing all this time.