Can You Reduce Debt for a More Comfortable Retirement?
Reducing credit card balances with great, average, or poor credit scores.
Obviously, people who enjoy comfortable retirements have usually worked very diligently to reduce or eliminate debt and build up savings and investments. If you are facing retirement with a big pile of debts, particularly unsecured credit card debt, this can seem like an impossible obstacle to overcome. However, you might benefit from considering some of these tips to reduce debt quickly.
It’s easier to reduce debt if you still have very good credit. Finance companies and banks are much more likely to work with you because they consider you low risk. However, there are still things that people can do if they have had some debt and credit challenges, but it might take a bit more work and creativity.
Quick Debt Reduction Strategies with Good Credit
A break from high interest rates on credit cards might give you a chance to reduce your balance a lot faster, and this means that you have less interest to deal with in the future. The Frugal Pig, a thrifty lifestyle website, suggests exploring the best 0% interest rate balance transfer credit cards if you have very good credit scores. Some offers have low fees and up to 18 months without paying interest. Again, these are usually only open to people with pretty good credit histories, though some offers might be attractive to people with fair credit.
Fair or Average Credit Debt Reduction Tools
The problem is that most people who have let debt pile up, particularly unsecured debt, will not have the best credit scores. Even though these people may make timely payments, credit bureaus still considered the amount of debt vs. the amount of allowed debt. People who have high balances are unlikely to have stellar scores.
Another option might be to consider using a P2P loan to consolidate debt with a lower interest rate. Even though P2P sites do consider information like credit scores when they apply a rating to potential borrowers, they don’t just rely upon that. They give individuals a chance to make their own case when asking for a loan.
Reducing Debt with Poor Credit
Once you get in a hole, it is tough to get out. However, that does not mean that you cannot reduce debt and improve your credit scores, and people find ways to do this every day.
The US Federal Trade Commission, or FTC, has credit counseling tips for people who just cannot figure a way out of debt on their own. They also supply lists of approved and legitimate services in different local areas around the country. You may or may not decide to take this path, because it isn’t an easy one either, but you can certainly take the time to learn more without making a decision until you have more information.
If you don’t want to take that step, you still might be able to consolidate debt with a secured loan at a lower interest rate than your high interest rate cards. If you have equity in your home, for example, you could try to borrow against it. Of course, this is risky because you do have to put your house up, so you need to be committed to paying this loan back on time.
Do You Just Need More Money?
Sometimes the answer is just earning more income, so you have a chance to make larger payments to your credit cards. As you know, just paying the minimum is unlikely to help you if you have let your balances get large. If this describes your problem, don’t forget to stop by our baby boomer jobs section for some ideas about full time or part time work.