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The average household in USA is $155,000 in debt, according to NerdWallet. To a third of Americans, borrowing is always very easy but paying back on time becomes a fist fight. It is in no way a secret that the issue of debt is so far an alarming problem. To the rescue, debt management organizations have come up to equip traders with various money saving ideas as one of the many steps leading to a debt free life.
Differentiating between good and bad debts can go a huge mile in cutting on unnecessary debt. About 46% of Americans, between months carry some kind of credit card debts accumulating to $798 billion. Categorically, this is a bad debt as it is not purposed for investment but passive spending. This worsens with the further sum of a 13% interest charge and the many errors often occurring on your credit card bills. Fortunately, the Fair Credit Billing Act has since come in to protect consumers from such errors.
Disputing Errors On Your Credit Card And Unfair Billing
Does your credit card debt look exaggerated? You can always evaluate it to look out for errors. These might include identity theft and unfair billing such as additional charges, double charges and deceptive pricing. You can further dispute these errors to minimize your debt. The Fair Credit Billing Act directs the various credit reporting agencies to attend to your disputes through investigation. They are also required to provide you with your credit card report at least once every year for you to look out for errors.
After you go through your report and identify the errors, learn how to write down dispute letters and do so for each error. You will also need to send a demand letter to the merchant for the case of unfair pricing. Make sure never to dispute online. These bureaus often take the furnisher’s word over yours. You must then include all evidence including receipts in your letters and mail them to both the bureaus and furnishers. Never take no for an answer.
Debt Consolidation
This option will work in minimizing your monthly payments, cut on your interest rates, secure your credit card score and ultimately help you do away with your debts in less time. It combines your many unsecured debts into a single bill. You can thus pay up for all using a single check. This way, you minimize often occurring mistakes such as late payment and incorrect figures as well as hefty bank transactions.
Minimize Debts By Avoiding More Debts
An effective way of cutting on your debts is by first avoiding any additional debts. This can only mean identifying the underlying causes of your current debt. Among them mainly being mishandling of credit cards and living beyond your budget. It is important to keenly watch what you buy with your credit card. Make sure it is a necessary purchase. This is made easier by living on a budget and sticking to it. This will definitely give you enough room to work on clearing previous debts.
These options might not be a quick fix for your debt. However, more importantly, they will eventuality get you out of it. This is only if done correctly. After all, ignoring your debts will only make them worse. Finding new ways to generate income is also great for managing debt. Cash from your side hustles could be directed to clearing debts. They could also fund businesses instead of seeking out loans.
