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What is Debt and how can I reduce mine?
Households around the world are currently experiencing
record levels of personal debt.
When the economy is buoyant, interest rates are low,
inflation is low and unemployment rates are low, it is easy
to be positive about our debts. It is easy to think we will
always be able to pay the mortgage, the car loan, the credit
cards and the other personal loans. And it's easy to keep
swiping the credit card or to accept additional credit.
Debt and credit are siblings and they are a symptom of our
consumer society.
Debt is the not the problem and nor is credit. The problem
is us the consumer. The problem is how we manage our debt
and use our credit.
Some people manage well and use debt to create wealth. For
others debt can lead to misery and despair.
So what is debt? Debt is simply how much you owe to others.
Put simply debt is money you have spent which you do not
have.
Too much debt can lead to trouble. It is easy to become over
committed and unable to pay. Consider Dave. He had a good
job in IT and earned over $80,000 a year. He lived the
highlife, purchased an expensive car, wore expensive clothes
and ate at fashionable restaurants.
Then the IT industry changed and Dave lost his job. It was
not long before he began defaulting on his car payments and
couldn't pay his credit cards. It took some time for him to
find another job only this one paid less than half his
previous salary. Debt had got Dave into trouble.
If you are in debt there are options which may be available
to help you. These options include debt consolidation,
mortgage refinancing, debt agreements or an informal
arrangement for instance.
Which option will be of most benefit to you is dependant on
your individual financial situation. Do some research online
and read up on each before deciding on one.
About the Author:
Fox Symes & Associates has guided and assisted over 10,000
Australian individuals and families resolve their financial
position and regain control of their lives. If you are in
debt and want to know more then visit their website at
http://www.foxsymes.com.au/ or contact them on 1300 559 899
(Australia wide).
Debt Consolidation And Credit
Credit card and even more so Store card interest are set at exorbitant rates for one reason alone, companies make their money from the consumer’s inability to settle their card balances. Credit card debt is unsecured, whereas other debt like your mortgage is secured (your home acts as security against your debt). With credit card debt, there is no backing security, which means that credit card debt is high risk for banks and hence the high interest rates
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