Puerto Montt Want to get out of debt?
If you ever wondered, How do I get out of debt?, you’re not alone. In fact, you are considered an average household if you have total balances of $16,000 on credit cards alone. For anyone above $16,000–just being “average” could be a big step in the right direction.
According to www.creditcards.com, the national average interest rate for credit cards is just under 15%, and a “low” interest card would be 10.4%. Those with “bad credit” likely carry debt at 24%. What bothers me is that every day I see hard working American families with “good credit,” and even “great credit” who carry debt at 18-24%. Dave and his wife Selina were one of those families. Although they had good credit and had not missed a payment they found themselves ambushed with high interest rates, simply because the big banks needed some extra revenue. Fortunately they were referred to Desert Valleys Federal Credit Union for help.
With their Capital One card at 24.7%, a Bank of America card at 18.99%, and an HSBC card at 23.9%, they calculated it would take them about 4 1/2 years to pay down their $19,000 balance, costing them around $11,375 in interest. Desert Valleys found a simple solution to get rid of all their high interest debt:
- First, they refinanced their auto loan to 4.99% (down from 6.49%).
- They took $4,000 “cash-out” from the value of their car, applying the $4000 to their credit card balances. (They borrowed $4,000 at 4.99%, to pay off credit card debt at 24%)
- They were approved for a 10% interest credit card from their credit union, which they used to pay off the remaining high interest credit cards (they borrowed at 10% to pay off debt at 18-24%).
- They would continue to make the same payments, applying the same payments to the new lower interest loans from the credit union. With the same payment amounts each month, and lower interest rates, they would be debt-free within 2 years.
- About $6,000 in interest would be saved.
Yes, it was that simple. And if you think that Dave and Selina only saved money by switching all their accounts from a bank to a credit union, they will tell you another story:
“The entire experience of dealing with a person one-on-one changed our perceptions overnight,” commented Dave. He then added, “The decision to check out my local credit union was the best one I have made since marrying my wife.”
There are hundreds of stories each week of community-driven credit unions helping their members escape the high-interest credit card trap. I hope that this story inspires you as much as it inspired me. If you live in the Ridgecrest, California area you can find the Desert Valleys Federal Credit Union at http://www.myhomecu.com.
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