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Choosing a loan or card, carrying a balance, and protecting the credit score that sets your rates. Borrow on better terms and pay off what you owe faster.
Pay a store card’s balance in full by the first due date, and its checkout discount is yours to keep. If you’d carry the purchase instead, a year of interest at the card’s rate, often above 30%, can cost as much as the discount saves. That’s still cheaper than carrying it on a typical credit card.
If you carry a credit card balance, call your card issuer and ask it to cut your interest rate. Issuers grant most of these requests, and each percentage point off saves about $10 a year for every $1,000 you owe. Lead with your on-time payment record and a better offer from another card.
Before you compare credit card rewards, decide whether you’ll ever carry a balance. If you might, weigh the interest a lower rate or a long 0% intro offer would save against the rewards you’d give up. If you always pay in full, ignore the rate and choose on rewards and fees.
Filing for bankruptcy makes sense when your credit card and medical debt couldn’t be repaid within five years, even on a credit counseling plan. Multiply what you can spare each month by 60. If that falls far short of what you owe, stop cashing out your 401(k) to keep up and talk to a bankruptcy attorney.
Bankruptcy wipes out most credit card, medical, and personal loan debt, but child support, alimony, recent income taxes, and most student loans survive it. Before you file, check which of your debts it would erase. If the ones you most need gone would survive, filing leaves your real problem in place.
Two facts settle most of the choice between Chapter 7 and Chapter 13 bankruptcy. Income above your state’s median for your household size means a second test for Chapter 7. Property a Chapter 7 trustee could sell, like home equity, points to Chapter 13, which lets you keep it. Check both before you call a lawyer.
Missing your credit card’s minimum payment starts a clock. A late fee can hit right away, a credit report mark at 30 days, a penalty rate at 60, and collections near 180. Each stage is easier to stop than the one after it, so call your issuer before the due date and pay the missed minimum before day 30.
Selling your car can free cash for your other debts when the sale clears the auto loan and whatever replaces the car costs less each month than the car does now. Check both before you list it, then send every freed dollar to your highest-rate debt.
Co-signing a credit card makes you liable for every dollar someone else charges, with no say in how they spend. An authorized user’s charges are yours to pay too. If you want to help someone build credit, put them on your own card as an authorized user instead, where you can cut off their spending anytime.
Many business credit cards don’t require a limited liability company (LLC) or an employer identification number (EIN). If you freelance, do gig work, or run a side business, apply as a sole proprietor, with your own name as the business name and your Social Security number as the tax ID.
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