holiday loaner

Well, we're in the crux of the holidays, and you know what that means - debt. Lots of it, for many people. Just today, I was conversing with my uncle about credit cards, loans and what one might commonly refer to as "smart debt".

It's so easy to fall back on high rate credit cards during the holidays and spend more than you should. In fact, I'm not surprised that bankruptcies are still a common occurrence. Not everyone has a family member or friend to financially "fall back on", and my uncle and I were discussing what those people can do when they are really in financial trouble.

For example, I know several people who are living paycheck to paycheck, and drive vehicles that are not very dependable. What happens when their car's transmission falls apart and they get a $1400 repair bill? In some cases, the automotive shop is willing to allow them to make payments. But what happens if they don't? In many cases, those high-APR credit cards come to the (temporary) rescue. For some, it is a catch 22, as the loss of their car further cripples their situation by making it difficult to commute to work and make more money. Most of them state that they cannot afford a more reliable car, but this could also be seen as one of those "spend more now, save more later" situations, *if* they have the money to spend now.

Those who are lucky enough to be homeowners with some equity can go for a line of credit or home equity loan. Personal loans are definitely a better option when you compare their low rates to that of the typical credit card, if the borrower has good enough credit to be approved. Some people who are having trouble just paying their monthly mortgages find relief in the form of refinancing, assuming that the refinance charges are manageable. Still others are finding interest-only loans to be the best answer for borrowing the maximum while paying the minimum, but these types of loans tend to work best for people who are looking at homes that will appreciate in value quickly on their own.

Personally, I'd recommend working with a debt consolidation specialist if you find yourself drowning in debt. We went to one, and while they don't pay back your loans for you, they definitely help you to evaluate your relationship with debt and come up with a "battle plan" to eliminate the debt that hurts the most, and how to better avoid it in the future.