Let’s face it, some of us didn’t know how to use a credit card when we had one and we weren’t aware of all the consequences we’d face if the credit card was miss-used. Unfortunately there is not guidebook for using credit products and family or friends’ advice as well as personal experiences are the best way to learn.
Once hit with a poor credit score, you will find there are many companies offering loans and quick pay day cash advances even if you have a poor credit history. Be very cautious of these products because they are very risky, expensive and you can end up nearing bankruptcy before you know it.
The best advice would be to avoid bad credit lenders. The interest rate is often much too high and not worth the cash received. The loan is often too hard to pay back and may put you in even deeper debt.
If the loan is an emergency and can’t be avoided, limit yourself to the emergency amount and ensure to pay it off quickly and not return. Too often people get a quick loan to pay off other debt like credit cards and end up accumulating more debt. This is the spiralling effect of paying debt off with other debt, which is costly and stressful.
Here are some ideas to pay off your debt sooner:
- Look for a side job to make the extra dollar. Whether it’s mowing lawns, fixing up bikes, painting, babysitting, waitressing etc. always remember the job is temporary until some or all of the debt is paid off. It will be difficult in the short run but worth it in the long run.
- If a side job is not an option, try borrowing money from friends or family. Pay them back gradually- interest free. You’ll save on interest and won’t need to put up with annoying collection calls and letters from creditor companies. It’ll put your mind at ease. In case your family or friends are hesitant, create a written pact to promise to pay the money back for their peace of mind.
- Consider applying for a consolidation loan. A consolidation loan puts all your debt together into one lump sum loan so only one monthly payment is required. The consolidation loan normally has a lower interest rate than a credit card so you save on interest.
- Sell your stuff on Craigslist or Kijiji. All of us have stuff lying around the house without any use. Why not make a few extra dollars on getting rid of it? As the old saying goes, one man’s trash is another man’s treasure! Rummage through all your rooms, especially the basement and see what kinds of goodies you can sell online. The money will add up and help you pay off some of those bills!
- Check out the FREEBIES section on Craigslist or Kijiji. People are giving free stuff everyday, and not just crap, but actually useful, valuable stuff. Just the other week we got a free BBQ, interlock stones, and a glass top dining table with 4 chairs, all from Kijiji and all for FREE. Selling these items will sure make another couple of hundred dollars that you can definitely use towards paying off your debt.