Dealing with personal debt issues

Most people know that personal debt levels are on the rise, and more and more people are dealing with the consequences of excessive debt. The sad fact is that credit is all but required in today’s world, and most people will find it difficult if not impossible to rent a car, book a hotel room or take a plane flight without a credit card.

This necessity of credit, unfortunately can also lead to excessive levels of debt. There are no classes on how to deal with credit cards the right way, and most people will need to learn these valuable lessons the hard way. Dealing with high levels of debt is never easy, but there are a number of steps average consumers can take to get a handle on their finances.

Perhaps the most important first step is to establish a realistic monthly budget and stick to it. Many of us have no idea where our money is really going, except of course for the regular monthly bills. Getting a handle on where your money is truly going every month can help you recapture some of that disposable income and use it to pay down debt.

If you are saddled with a great deal of high interest credit card debt, you may want to consider using a debt consolidation loan to eliminate that high interest debt. Getting a more favorable interest rate can make a big difference when it comes to paying off credit card bills.

Be careful, however, about using a home equity loan to pay off credit card bills. Credit card debt is unsecured, but if you use a home equity loan to pay it off, that debt will be secured by your most valuable asset, your home. If you do decide to use a home equity loan to retire credit card debt, it is important to avoid running up any further credit card debt as you go forward.

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