And it might get worse before it gets better. And if we as consumers,
as an individual, if you don't protect yourself, if you don't do
something differently, if you don't change your behavior, you're going to find yourself
in a really, really bad place. Because you know, if you're already
in credit card debt, every single time that the Fed, the Federal Reserve,
every time they raised interest rates, that's not just for mortgages, that's
not just for loans, auto loans. Every time they raise that interest rate,
your credit card interest rate went up. You're listening to Carrie Let's's Financial
Survival Network, where you get valuable information you just can't find anywhere else to
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Financial Survival Network now more than ever. And welcome. You are listening
to and watching the Financial Survival Network. I'm your host, Kerrie Lutz.
Well, we're just past Black Friday, it's actually Cyber Monday. Credit card
debt is zooming out of control, hitting into all time highs going into the
holidays. What does it mean for you? What does it mean for the
economy, for the global economy, and what do you do about it?
Paul Oster is with us now Better Credit dot Com. Hey Paul, it's
great to have you back on the show. So it seems like there's no
limit to the amount of debt the American consumer will ring up well, and
it's you know, particularly troubles to them on today because what most people will
do if they're shopping online for Cyber Monday is use a credit card and not
a debit card. So the best case scenario would be that they actually use
a debit card. I actually recommend getting a prepaid gift card right, and
this will do a couple of different things. This will keep you do on
budget, right, So you have to do some mental math and figure out
exactly how much money you can afford to spend during this holiday season. And
listen, if you're already in credit card debt, that number might be zero.
Maybe you can't afford to buy any gifts this year, And it's okay
if you ask the person. If you're troubled with the fact that you might
not be able to afford it, ask the person that you were going to
buy that gift for what you bought them last year. You probably don't remember
and they probably don't remember, so it's not that big of a deal.
People tend to put way much more pressure on themselves during the holidays. But
let's say you come up with a number and you say, I can afford
to spend two hundred dollars this holiday season, I'll be able to pay it
back over the next thirty days. Is the longest time it should take you
to pay off a debt is ninety days. You have three months to pay
off any new balances that you're going to put on a credit card, because
if you don't, whatever you spend, it's not two hundred dollars anymore.
After the first thirty days, that becomes two hundred and twenty dollars, then
it becomes two hundred and fifty dollars, and it just keeps growing. So
you have to start with a plan. You have to have some type of
budget in place, and you have to be able to figure that out mathematically.
I always say this, it's not complicated, right. I'm not saying
it's easy, but it's not complicated either. How much money do you make
every single week, every single month, and how much are your expenses and
if there's some money left over that you can afford to spend on the holidays,
that's great. Just try not to go over that number, so be
disciplined about it. And one of the easiest ways again to do that is
to buy a gift card. When the gift card is empty, you're done.
That's how. That's a great approach. That's the end of the gifts
right it is, and listen. It will also help you know, lessen
the threat of cybersecurity right right now. These bad actors, these identity these
these fraudsters are out there. They're capturing people's credit card information, debit card
information, and that's one of the problems that's using a debit card online.
They will have direct access to your checkings and savings accounts, so you have
to be really careful about using those cards on websites. They have gotten so
good at creating fictitious websites. They look exactly like Best Buy, Amazon,
Walmart. You think you're on their website, but you're none, and you're
actually giving them all of your information. So if you use a gift card,
the very worst case scenario is they only have access to that gift card.
Really careful, do not click on links. If you see ads on
social media that are just too good to be true, it is it is
too good to be true. What it's called clickbait. They're trying to get
you to click on this site. They can infect your computers with malware and
viruses, and that leads to a whole nother host of problems. So just
be really diligent. And what happens is life happens. So we're running around
in this frenzied pace right now, and we do things that we wouldn't normally
do. So take a deep breath, take a step back, take your
time, if and when you're going to have to do this today, take
your time. Yeah yeah, so, but how many people are really going
to listen to this ball? Well, look at all I've been trying to
do for the past twenty years is change people's behaviors. And this year is
like no other year. Carry I hear it all the time. All we've
been down this road before, we've been here before. We're going to get
through this. We've never been where we are today. We've never been down
this road before. We're not even on the road, we're off the road.
You know, we're we're in a path songwhere tracks we are off the
tracks, right, it's off the tracks. The world economy, the macro
economy, that the economy in the United States is not good and it might
get worse before it gets better. And if we as consumers, as an
individual, if you don't protect yourself, if you don't do something differently,
if you don't change your behavior, you're going to find yourself in a really,
really bad place. Because you know, if you're already in credit card
debt, every single time that the Fed, the Federal Reserve, every time
they raised interest rates, that's not just for mortgages, that's not just for
loans, auto loans. Every time they raise that interest rate, your credit
card interest rate went up. We were somewhere closer to fifteen percent before we're
all of these rate hikes. Now we're closer to twenty percent. And if
you just had the average credit card debt is now over five thousand dollars.
And if you have a five thousand dollars credit card debt and you only make
the minimum payment, it would take you over twenty years to pay off five
thousand dollars. And at the end of that twenty years, you didn't pay
back five thousand, you paid back more than double. It's like twelve thousand
dollars. So this is where people have to understand how credit card debt works
and why it's so so troublesome. Yeah, it just seems to multiply like
electronically like rabbits. You know, well, it kind of does, right,
because it's it's daily compounding interest. And here's a quick lesson on daily
compounding interests. It does multiply. Every single day, your balance is recalculated
on the previous day's balance, and every single day the interest is added to
that balance. Luro's balance is going to be higher. If you don't spend
another dollar, your balance increases every single day. So that is how people
get into trouble, very very quickly with credit card debt. Again, listen,
I get it right. We're in the holidays. Yeah, if you
have to spend some money, okay, but start to put together some type
of plan to get yourself out of credit card debt, and maybe you have
to pick up a second job. You get it. You get a side
gig, you get a side hustle for the amount of time, and it's
going to take you to pay off your credit card debt, because if you're
not going to get it, if you're not going to increase your income,
then you have to decrease your expenses. And you and I we've spoken about
this. The easiest way to do that are all these subscriptions that we have
Netflix, Spotify, Ooh, Roadblocks, Xbox PS four, all of these
Prime this, Prime that music videos and that for old family. That could
add up to hundreds of dollars a month. Yeah, hundreds of dollars a
month. So if you cut your subscriptions, and I'm not saying you have
to do it for the rest of your life, I'm saying you have to
do it until you're out of credit card debt, right all right? I
like it. I like it. I wish more of you out there would
listen because it really does make a big difference, doesn't it. Well,
it sure does. And again, maybe even consider if you own your house.
If you own your home, and I know mortgage intertraints, you see
it in the news every single day. They're at eight percent, Well eight
percent is better than twenty eight percent. So if you have the ability to
do a cash out REFI, if you have the ability to get a home
equity line of credit to pay off that high interest credit card debt. If
you own your own home, you should only have one debt service, and
that is your mortgage. And if you need to take out a second mortgage
to do it, do it because there's some tax benefits that are associated with
doing it that way. And it's again, eight percent is better than twenty
percent. Twenty eight percent, right, So if you have the ability to
tap into the equay of your home, that might be a way to get
out of credit card debt. If you can take a small loan against your
four oh one K, that might help. If you're still putting money into
your four oh one K but you are carrying thousands of dollars in credit card
debt, it doesn't make sense, right because you're not getting the same return
on your money in a four oh one K that you're spending to carry that
debt. So maybe you pause your four oh one k. Wrong with our
irase your retirement contributions, you pause that for a little while again, until
you're out of credit card debt. That should be the number one focus.
Don't go wait next year, right. We hear it all the time during
this time of the year, Paull twenty twenty four. I'm going to change
this. I'm going to do this, and well do it now day because
if you're really serious about it, you don't wait until January one. Put
the plan together and execute it today. Yeah. Hey, it's never too
early, right, No, No, it's only too late. I mean
the best time to do it was was six months ago. The second best
time is today. So the message really for today, change your behavior and
be very proactive about dealing with your credit card debt. Yeah. Absolutely,
Yeah. I couldn't agree with you more. And you're like so emphatic about
it, Paul. People have to stand up and take notice if you've got
credit card debt out there and it's getting out of control, because eventually it'll
overwhelm you and then your only chance choice will be bankruptcy. Right, that's
right, and listen, bankruptcy is not the end of the world. And
again I'll go back. I think you and I have spoken about this.
One of the biggest tragedies that happens across in the across the world, and
certainly in the United States. It happens all the time. People actually commit
suicide because they're in debt or or they commit crimes because they're in debt.
You don't have to do that if you if you can, if you're eligible
for a bankruptcy, it's not the end of the world. It's actually over
the end of your life. It's the beginning of your new debt free life.
So if you're struggling with this and there's really no end in sight,
you're just buried under this debt and the stress of the debt, reach out
to a reputable bankruptcy attorney. Contact better Qualified dot com. We have bankruptcy
attorneys all over the country right so the consultation and analysis is free. So
we will figure out what is the best plan for you. And in twenty
years, thank god, I've never had to say to somebody, we can't
help you, because as long as you're willing to help yourself, is a
plan that we can put in place to help every single person in this country
get out of debt. And it's time to make that plan a reality in
twenty twenty four. Stop waiting for something to happen that isn't and take action
on it. I mean, that's that's the best thing you can do.
Hey, just tell us again where we find you again. Paul, go
to better qualified dot com. It's again, the consultation and analysis is free.
It's a very very brief phone call to at least figure out what we
can and can't do to help every single person, every one of your listeners
and viewers. There is a plan that we can put together for every single
person that will help them get out of debt, improve their credit. Right
your credit scores. Your credit scores have always cost or saved you money every
single day, every single week, every single month. In this environment,
your credit scores are going to cost you even more money than they used to.
So if you're not a seven hundred and forty credit score or higher,
you do need to call us because that's where every single person needs to be.
Look, it's not easy to be a seven hundred and forty credit score,
but the reality is if you're a seven to twenty, it will cost
you more money. If you're a seven hundred, it costs you even more,
six eighty, six, sixty, go all the way down into the
six hundreds, and man, that score is costing you more money every single
day for the same exact thing that your neighbor. You go out and buy
the same exact car as your neighbor. If you're at a six eighty and
they're at a seven eighty, they're going to spend hundreds of dollars less every
single month for the same exact car. When you talk about the financing and
the insurance, let's remember insurance is directly tied to your credit now, so
if you have a lower credit score, it could almost be double your policy
in premium payments can be double if you have bad credit. Really, so
let's get everybody you know, let's figure out how to help people improve their
credit scores, and let's help people figure out how to get out of credit
card debt. All right, I like it, and I think the time
to do it is now. So hey, you should definitely get in touch
with Paul if you got a question for me or Paul shoot me an email
kl at Carrie LUTs dot com and the link to paul site will be in
the show notes of this interview on Financial Survival Network dot com. So when
you go there, just click that link. While you're there, sign up
for your free newsletter. Paul. Always a pleasure and really great advice for
what hopefully will be a better new year ahead. Absolutely absolutely thank you for
having me back on. Thanks for listening to Carrie Letz's Financial Survival Network,
your solution to today's trying times. For the latest, go to Financial Survivalnetwork
dot com Shill Survival Network now more than ever,