When it comes to doubts or something happens to us, we go with someone you trust to give us your point of view or some advice, but how good is it when it comes to getting out of debt? We had the opportunity to talk with some clients and discovered certain myths that they considered an absolute truth because a family member or friend had been the source of the information.
These are the most common myths when it comes to getting out of debt:
1. “Pay the minimum and it will take less to pay off your debts”
Error! Too bad that many people let themselves be guided by this comment to manage their credit card. When you pay the minimums and nothing else, what you will get will be a surcharge on your next payment for not depositing the full amount that corresponded (interest).
Now, if it becomes a constant practice, be sure that you will pay more than you originally owed. Even the minimums could exceed your ability to pay.
2. “When paying off debts, you automatically“ leave ”the bureau”
This is totally false. Credit information societies that manage the data of all people who have a debt follow specific processes. Once the debts can be settled, the report is updated and will appear as paid, but the record is not eliminated, since this is maintained for some time according to the amount owed. When you settle with Solve your Debt, they can help you improve gradually.
3. “Do not pay, after 6 years the debt is cleared”
In several forums I have found this question and the answer is: NO.
What happens if I do not pay my credit card or any loan you have acquired with a financial institution? The following will happen: the amount to be settled will increase due to default interest and non-payment charges. Don’t pay attention if they suggest you stop paying as long as you are forgiven in a few years, that’s a lie.
4. “I can go to jail if I don’t pay”
This argument is used by many collection offices to intimidate those people who owe some amount of money and have stopped paying. What is a reality is that no one can go to jail for owing money, because it is not a crime.
5. “Debts are bad”
Once they explained to me that having debts does not mean that your finances are upside down. Credit cards and loans are tools that if used correctly can help boost a business, buy high-value goods or items or simply to facilitate the administration of your money.
I frequently use my card, either to have a credit history or to make purchases without the need to bring cash and not expose my payroll or debit card to a theft or possible loss.
Control is usually lost when there is no emergency savings fund and it is easy to apply for a loan or give the card to absorb expenses.