Although it is embarrassing to admit this to everyone who reads my blog, my husband and I have suffered from financial difficulty in the past. We've even filed for bankruptcy because we had no other option (and just to clarify, so no one makes any assumptions, it was due to a cut in pay, not a lot of credit card debt). But then, who doesn't suffer from money issues sometime in their life? Unless you're born with a silver spoon in your mouth, chances are you're going to have money problems at some stage in your life.
Now that our bankruptcy is years behind us, we have been able to start building up our credit again. We bought a house, we've paid consistently on our credit cards (which have a very low limit on them per our request), and our credit is slowly but surely going up again. Do you know how good it feels to see that number rise over 50 points in just a few months?
Bankruptcy isn't the only option though, and for most people it is the absolute last resort. Another option is to consolidate debt. A great way to consolidate debt is to get a debt consolidation loan. Loans like this "typically have a minimal effect on your credit. In most cases, you apply for a home refinance or debt consolidation loan and use the proceeds to pay your other debts. Although you will now have a single larger debt on your credit report, several small debts will be eliminated, lowering the credit utilization of those accounts." You could also get another credit card, which I do not advocate, and transfer balances to the higher limit card. Then take your payment from the old card, and apply it to the newer credit card.
For my husband and I, the best option for debt consolidation would be to get a debt consolidation loan. I would much rather have one payment than have numerous ones, and get calls from creditors all the time. And I would think that a loan is probably the best option, because at least you get to avoid a bankruptcy on your credit report, right?
A debt consolidation loan can help you save money as well, which is really important with the way our economy is these days. You can lower your interest rates with a loan like this, which in turn can save you hundreds of dollars a month. And with that extra money, you could put it towards a 401K, or an IRA or something like that. Everyone needs to prepare for their future, because no one is going to take care of you but yourself. It is evident that Social Security won't be around for our generation, so we all need to save save save! You're also going to have to budget, so give up everything that you deem "not necessary". For some that might mean giving up their satellite service to save $80 a month, or to others; giving up their daily Starbucks habit. Regardless of how you save, just save as much as you can.
With Debt consolidation, and saving money, you should be well prepared for your future.