There is so much information on the Internet these days that a common myth regarding credit card debt can be easily overlooked. That myth is the understanding of debt reduction versus debt consolidation and/or how debt management companies can be your “save all” when it comes to getting you out of debt. As the largest Christian Debt Reduction company in the United States today, our goal is to try and simplify the blogs, newsletters, and articles we see everyday across this entire spectrum of “debt help.” We try to make it easier for the everyday person with no knowledge of the debt settlement industry to understand what it means to get out of debt and specifically “the debt trap.”
If you happened to come across an article or a blog that makes absolutely no sense to you and want to share that with us, please feel free to email it to us at firstname.lastname@example.org, and we will be more than happy to explain to you what the writer is trying to get across to you in his or her article. You will also be helping a lot of people at the same time…probably more than you can imagine.
I would like to talk a little bit about a common myth regarding credit card debt. This is from an article that was published online that someone forwarded to us as well. Again, we feel it our responsibility to help set the record straight, especially when it consist of something regarding debt relief, or sole and core business.
Myth: I should be paying off the debt with the highest principal I owe first. Then once that one is paid off, attempt to pay of my next largest credit card debt, and keep going down the line.
Truth: Actually, you should be doing just the opposite. It is a lot easier to pay off your smallest debt first, get that one out of the way, and work your way up the line from there. This is known as the snowball effect. As intelligent people know, credit card debt can “snowball” faster than the bills come in, mainly due to the credit card companies raising interest rate on your credit card debt, usually for no reason at all. The snowball effect as to paying off credit card debt has been circulating around the Internet for a little over three years now. You can go to any search engine and just type in the term and you will get the picture. However this is not always the best way to attack debt either. The folks that advocate the snowball effect would prefer you tackle the smallest debt first then use that money to pay off the next highest credit card etc. Then once creditor # 1 is entirely paid off, you then use that money to work on paying off the next credit card. This is “feel good” concept in that you getting rid of some of your credit cards faster, however what happens when you get to the “big boys.” If you feel like you are having some relatively quick success in paying off your smaller debt first, you are more likely to stay “in the game” and go after the next credit. What you do not realize is that your higher balance accounts with the higher interest rates, is building up almost twice as fast as the “little guys.”
Again, the principle of the snowball effect is to stop everything except minimum payments and focus on one credit card at a time. Otherwise, nothing gets accomplished because all your effort is diluted. At Nationwide Debt Reduction, we are absolutely opposed to this type of credit card debt management. Creditors cannot be ignored, especially the big ones with the high interest rates. We would much rather have our team of professional negotiators settle those debts for a fraction of what you owe first. This way, you do not have interest building on debt that could take you years to get to.
If you are an average family in America today, you currently have approximately 5-7 credit cards in your wallet, and you have somewhere between $25,000 to $50,000 in credit card debt.
You cannot afford to sit around and “feel good” about paying off your smaller debts first when the stakes are much higher at this level of credit card debt. Therefore, we believe that by utilizing a debt settlement process, such as the one we use at Nationwide Debt Reduction, you will have a professionally trained staff of attorneys, paralegals and debt advisors whose sole business is to negotiate directly with each of your creditors to negotiate and settle your current debt for a fraction of what you owe. Leave the snowballs to the kids playing outside in wintertime.
For more information on how you can see if you qualify for a debt settlement program, call our toll free number at 800-890-6658 and find out for yourself. You will talk with a professional trained debt advisor, not some salesperson, who truly wants to help educate you on the pros and cons of whether a debt reduction program could work for you.