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5 mistakes to avoid when paying off debt

5 mistakes to avoid when paying off debt

When trying to reduce or pay off debts, one may want to rush the process without understanding the risks involved. However, this can lead to mistakes in managing and clearing debt. Some of these lapses can even increase the debt burden. So, whether one is trying to pay off credit card bills or loans, one should avoid the following common mistakes. This can help them manage debt properly and ensure a financially safe future.

1. Ignoring the emergency fund
When setting a budget to get out of debt, one should not ignore adding to the emergency fund. Continuing to allocate some money for emergency funds while still struggling to pay off debts may seem impractical. However, these funds can be life-saving in unforeseen events, like a medical emergency. Further, if faced with an urgent need, the lack of funds can make one borrow even more money to cover emergency expenses, thereby increasing the overall debt burden. So, to avoid such a situation, one must ensure that they continue to set aside some money each month for emergencies, even while managing debt.

2. Closing credit cards after settling dues
When one is done paying off their credit card debt, they might be tempted to close that card. However, this would be a mistake. This is because one’s credit score is heavily dependent upon how long they continue to have a credit account. So, if they cancel a credit card that has been active for a long time, their credit score will be impacted negatively.

3. Not saving for retirement
After one retires, the savings and investment options one planned for earlier will be all one has to ensure their financial security. So, just like emergency funds, retirement savings also should not be ignored while paying off debts. One must continue to plan for retirement and invest money into retirement savings, even if it means one has a little less money for debt repayment each month.

4. Not asking for help
When in debt, one may want to put off asking friends or family for help. But, as debt can get overwhelming, getting some assistance and advice may help. Alternatively, one can even reach out to non-profit organizations that offer credit counseling and recommend methods for managing their debt. Nevertheless, in such situations, it is better to keep a friend or a family member informed so they can provide support when necessary.

5. Not tracking expenses
One of the most common mistakes to avoid making when paying off debts is controlling their spending. This is because if one continues to spend excessively without setting a budget, they may find it hard to cover basic monthly expenses, and this would make it even harder to pay off their debt. So, to completely eliminate the burden of debt, one should start by changing their spending habits, creating a budget, and sticking to it. Until the debt is paid off, one must ensure that they are only spending their money where absolutely necessary. A budget will help them keep track of all expenses and see which ones can be avoided to leave more money for debt repayment.

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Top debt settlement companies in the USA

Incurring debt is really common in this age and era as everything has become extremely expensive, from college education to owing a house. If you ever feel that your debt is too large and you may not be able to pay it in time, then you can seek the help of a debt settlement company. These companies essentially communicate with your creditor to try and lower your debt and the rest of it is typically forgiven. Given below is a list of the top 9 debt settlement companies in the USA. National Debt ReliefIf you have USD 7,500 or more in debt, then the National Debt Relief can be a great choice for you. It is one of the most prominent debt settlement companies in the country. The initial consultation is offered for free, but you will have to pay 15-25% of the settled debt amount as a fee. Freedom Debt ReliefThis a dedicated company that offers debt relief services to people who have at minimum USD 7,500 to USD 10,000 in debt. 15-25% of the settle debt amount is charged as fee once a settlement is negotiated, and in return, they offer the possibility of settling the debt within 24-48 months. CreditAssociatesCreditAssociates surely is one of the top 10 debt settlement companies because of their satisfying services. They help customers who have USD 7,500 or more in debt and charge a portion of the settled debt. You can also use their services via mobile apps. Accredited Debt ReliefGenerally, people with a minimum debt of USD 10,000 use the services of companies such as this to lower the due amount; however, Accredited Debt Relief has no minimum amount stated on their website. They take two to four years to complete the process and the fee is charged only after that. CountryWide Debt ReliefThey recommend that customers with USD 10,000 or more in debt avail their services to get their debt resolved. They promise to lower the debt by 20% or charge nothing. Their track record shows a great success rate. United Debt CounselorsIf you are looking for the top 10 debt settlement companies, United Debt Counselors should be considered. This company offers its services through professional debt counselors to help you settle credit card or unsecured debts. Century Support ServicesCentury Support Services can help you reduce your debt effectively. The consultation is initially free and the fee is charged only after the first payment is given to the creditor. Subsequent fees are taken in a similar fashion.Elite Financial ServicesThe company offers to settle your unsecured loans in as short a duration as 12 to 36 months. They provide debt analysis for free and charge the debt settlement fee only after the process is completed. New Era Debt SolutionsNew Era Debt Solutions has been providing debt settlement services for over 20 years. On average, they have helped reduce around USD 250,000,000 for their clients can reduce your debt by 47% of the original amount. Now that you know the top 10 debt settlement companies in the USA, you can compare their fees and services to determine the best one for your needs.

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Top 4 mistakes to avoid with debit cards

Debit cards make our daily lives much more convenient. Whether we wish to withdraw money or buy our favorite products from the store, these cards make everything possible. Unlike credit cards, we also do not have to bear charges or pay high interest rates at the end of every month. But although debit cards have so many positives, we must use them wisely. There are a few common mistakes people must avoid.  Not keeping a record of all transactions All debit card holders know how beneficial that piece of plastic is. It makes all shopping transactions easy by completing them with just one swipe. However, after someone swipes their card and checks their account statement, they may often realize their balance is still the same. Sometimes, a debit card transaction can take a few days to reflect in the balance. So, it is vital to keep an offline record of one's transactions and update it regularly. If a person has a joint or shared checking account, they must also record their partner's debit card usage and transactions. If they do not do so, they might accidentally use the card for a transaction without realizing that their account balance is low. Using too many out-of-bank ATMs When withdrawing cash from an ATM, people should use the machine present at their bank. The ATMs at banks are more secure and better protected compared to those at airports, malls, and other public places. These ATM kiosks are not secure, and scammers can rig them easily. If they are rigged, someone could access the machine to steal its users' debit card info and money. Sure, finding a bank ATM can take time. But it can stop people from falling into the trap of scammers and losing their money. Writing down the PIN Some individuals struggle to remember their debit card PIN, so they write it down on a piece of paper. While this may be a convenient solution, it could be dangerous. If the paper falls into the wrong hands, the individual could lose all the money in their checking account. So, people should never write their PIN anywhere. Even if they do, they should not keep the debit card and the paper containing the PIN together. Many people store both of these in their wallets. This is a big mistake that should be avoided as much as possible. Using debit cards for big online purchases Debit cards do not attract interest like a credit card. But using a credit card is sometimes better, especially for expensive purchases. Credit card transactions are safe under the Fair Credit Billing Act. So, if a person accidentally makes a fraudulent transaction with it, the transaction would take the bank longer to process. It would also be considered disputed. In the case of a debit card, the transaction would immediately go through and remove money from a person's checking account. It would take longer for a person to get their money back in this scenario and lead to unnecessary hassle.

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