10 Greatest Myths about Credit and Debt
Myth 1: I'm a loser and a failure because I'm in financial trouble.
Reality: You have to accept responsibility for your actions and remember
that you did accept the credit with the promise of paying it back. But
most families and our schools do a poor job of teaching financial responsibility.
How many classes did you take while growing up that taught you how much
credit you should accept? Maybe the truth is that you made a mistake and
got in over your head because you didn't know better. If you can learn
from this mistake, you are neither a loser nor a failure. Accept your
setback, learn from it, and move on.
Myth 2: My financial condition is so bad that my situation is hopeless.
Reality: Although your problem may not be solved in a way that you would
envision, a resolution can always be found. Open your mind and be realistic
about your options. Ultimately, you have to choose a solution you are
most comfortable with.
Myth 3: The credit card companies wouldn't send me applications in the
mail if I couldn't afford it.
Reality: Wrong. The credit card companies are simply making you an offer
based on mailing lists or research they have performed. It is your responsibility
to determine whether you can afford to accept their offer.
Myth 4: Everything is okay because I pay the minimum payment due each
Reality: By just paying the minimum payment on a debt, you extend your
payments for many years. If possible, send more than the minimum payment.
If that isn't possible, you are probably living close to the financial
edge. What would happen if you were injured or sick or could not work?
Simply being able to live from paycheck to paycheck is not a sign of financial
Myth 5: If my debts get to be too much, I'll just file for bankruptcy.
Reality: Bankruptcy is a very serious matter and should be a last resort,
not an easy out. It is a legal case filed with the bankruptcy court that
is a matter of public record, and it can be reported for the rest of your
life if you apply for certain loans, life insurance or jobs. Many people
who have filed bankruptcy wish they had tried other alternatives before
filing. Once you file, you will always be ''a person who filed bankruptcy,''
and you can never take that back.
Article continued at http://www.ivillage.com/money/life_stage/deepdebt/articles/0,,191957_201068,00.html
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