Debt LoadWhat Is A Good Debt Load?Of course, the credit card companies and other types of money lenders are thrilled to lend you as much money as they think you will be able to repay. Yes, they take a risk, but it's a carefully calculated risk. They do not intend to lose their money. They investigate the default rates and current interest rates, and they meticulously examine your credit history and FICO score before they will grant you a loan. As a borrower, you can benefit by taking a closer look at some aspects of their decision making process. Tips for easy credit card approval can be found elsewhere on this website. What Are Your Chances Of Defaulting?Before you even decide to apply for credit, consider whether you will have to default on the repayment. What are the odds? If the odds favor your defaulting, then don't borrow the money. Defaulting is never worth the consequences.And don't entertain the possibility of defaulting on purpose, or filing bankruptcy. Again, the consequences for these actions are never worth it. Defaulting or declaring personal bankruptcy should always be considered a LAST resort and never a plan. Where Are Interest Rates Heading?Interest rates are what's called an indicator. By reading the newspaper or watching the financial news, note the current interest rates and try to predict whether they will rise or fall or remain the same. That's what businesses do. They spot the general financial trends. If interest rates are rising, then it might not be a good time to borrow.There are other indicators as well, such as bonds and futures. For instance, if 7% bond option prices are falling, investors are betting that interest rates will soon advance beyond that. By observing the actions of professional investors, you will get some idea of where interest rates and inflation are heading. Would You Loan Yourself Money?Obtain a copy of your personal credit history and try looking at it as a lender would. Examine it from their perspective. For example, would you lend yourself $15,000 at 8% for 60 months? How much credit debt do you currently have? Would you consider yourself a good risk? Be honest.Avoid justifying late payments or defaults. You either have a legitimate reason for not paying on time, or you haven't yet developed the inner strengths or financial resources to repay your debts on time. Don't set yourself up for failure. You know yourself. If you don't have the willpower or resources to repay your debts, then don't borrow money. How To Get Your Totally Free Credit Report Can You Really Afford A Loan?Take a realistic view of your total income and expenses. You have prepared a Budget, right? If not, do so now; don't put it off. Know where you stand financially. Though you might want to buy or lease a new car, can you really afford an extra $450 per month and still meet all your financial obligations? You need to be really truthful with yourself.When totalling your income, you can include expected increases, but be realistic. A hoped-for raise or possible income from the sale of some items on eBay is not guaranteed. Remember the old saying: "Don't count your chickens before they hatch." About Budgeting Finances Are You Buying On Impulse?Perhaps you have been dying to get a new big-screen television. Only you can decide whether it's worth paying a $150 per month credit card payment at 18% just so you can enjoy it a year in advance. Is having the thing you want today of greater value than the extra money you'll spend on interest charges? Or, would it be wiser to wait and save up for it?You should at least consider all your options. Resist impulse buying! It's through impulse buying that most people end up with too much debt load. Credit card users are especially prone to buying on impulse. It's all too easy to get what you want now without having to think about paying for it. Consider This...Whatever it is you're wanting, if you simply wait a few months and save your money, you will not only be able to pay cash for the item, but you will be able to buy a better quality item or get something else with the money you would have paid in interest charges.Yes, saving takes willpower, but the results are worth it. You get much better value for your money, and you will avoid debt load. Don't pay the money lenders; pay yourself. Are You Evading The Facts?What are the facts? The facts are determined by truthfully answering some hard questions. Do you really need the item? Could you save up for what you want? Is it true that you cannot afford to make payments?Never evade the facts. The surest way to get into trouble financially is to assume too much debt load. It could take months and even years to pay it off. Always think ahead. Face the facts honestly, and you will always make the right choices when it comes to borrowing money. The less debt load the better. TOP of Debt Load RETURN to Eliminate Credit Card Debts HOME to Get The Best Credit Cards
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