Many homeowners have come upon financial difficulties over the past year or so thanks to the recession, cutbacks at many homeowners’s place of employment, as well as a variety of other economic factors. One way that many homeowners have used to survive these financial times is by using credit cards to pay bills or simply afford the basic necessities. However, many homeowners who find themselves in a large amount of credit card debt are using a variety of ways to combat this debt and get out of credit card debt quickly.
While financial advisors differ on their opinions when it comes to combating credit card debt, homeowners who may be considering using one of these various methods are often advised to make sure they do their homework so that they may be certain the path they choose to erase their credit card debt will be in their best financial interest.
Some homeowners have simply drawn up a financial plan, a budget, and have begun saving more money so that they can combat their credit card debt. These homeowners simply look at what they are bringing in, what they owe, and formulate a repayment plan to pay down their credit cards and simply live within their means. Many financial advisers believe that this is one of the best ways to attack credit card debt and it can be quite cost-efficient if a homeowner has the financial discipline to stick to their budget, stop making credit card charges, and get out of debt.
Other homeowners have been choosing options like credit card debt consolidation loans or cash out refinancing options on their home loan. Obviously, homeowners who choose a consolidation loan have been able to pool their credit card debt into one monthly payment under this loan, which has made repayment easier for many homeowners. Yet, there are others who believe that by consolidating a homeowner will be paying much more, when interest is factored in, over the repayment lifetime of a credit card debt consolidation.
Another option many homeowners have been using is cash out refinancing. Essentially, a homeowner uses the equity they have built in their home to refinance, get money back, and pay off their credit card debt. However, advisers who are against this form of debt consolidation often cite the fact that homeowners are taking an unsecured debt, their credit cards, and attaching it to a secured debt, which is their home loan. There are many who argue that homeowners who use cash out refinancing many eventually end up in a situation where they cannot afford their monthly mortgage payment, and risk losing their home.
While each individual homeowner’s credit card situation is different, there are various means and methods which one can use to erase their debt quickly. However, some standard rules that are often given to homeowners who are looking for a way to get rid of credit card debt is to do the research, look at their personal situation, and make sure that they find a plan that is going to be affordable, and allow them to get out of debt with as little cost as possible.