Avoid these “get out of debt quick” pitfalls!

Thermometer Bursting with DebtEveryone has their own personal finance story – a history with money that’s gotten them where they are today. And anyone who has ever managed debt in the past knows getting out of debt is incredibly rewarding. Whether your debt is from student loans, credit cards, auto loans or unfortunate legal debt, there are very few shortcuts to paying off debt. 

It’s true that you don’t have to pay off debt for the entire course of a loan. You can refinance an auto loan at a lower rate, or prioritize larger monthly payments over short-term saving to pay down debt faster. Credit Union of Denver has some great options that can assist in your goals to lowering your debt. We have a refinance option that may be able to lower your auto loan rate by at least 2% plus $200 cash and the opportunity to take a 2 month payment vacation. We also have a Platinum card Promotion with a special balance transfer rate for 12 months from the open date for new card holders. You can visit our Promotion page for more details on both of these great options.

Avoid these debt pitfalls:

1. Putting too much effort into paying off debt. There are many theories out there about the best way to pay off debt. Paying just a bit more than the minimum payment is a great way to pay down debt a little faster and save on long-term interest. However, be sure to weigh the pros and cons of giving up interest-bearing savings and checking accounts over debt savings. Also, remember to invest in your own personal emergency fund, too. 

2. Taking out personal loans. Again, heed with warning! Consolidating some debt at a low interest rate via a personal loan isn’t a bad idea – if you know what you’re getting yourself into. If this is a route you decide to take, speak to one of our Financial Service Representatives who would be happy to review all the options and assist with choosing the one best fit for your financial goals. You can reach our Financial Service Representatives directly at 303.202.5659.

3. Relying on a payday lender. Just don’t. 

4. Robbing Peter to pay Paul. And lastly, avoid missing monthly payments at all costs. Some personal finance gurus recommend paying off your lowest debt first or your highest interest-bearing debt first, but either way, missing payments on one form of debt doesn’t help your credit or your personal finance situation. 

Not only do we have options to help you pay off debt, we have other great options to help you save as well. We offer a Starter CD with terms of one year or two. A Starter CD is a CD that you can add on to during the term. You can set up an automatic transfer of a set amount each payday, which can help you reach your savings goals. The Starter CDs are great ways to save for specific goal like an emergency fund, plates for a vehicle, school supply shopping, vacation, or children’s birthday parties. The options are endless. We also offer a Holiday Account, which will help you save for gift purchases during the holiday season without crimping your normal monthly budget. You can begin this CD any time during the year. Add to the Holiday Account until the last business day of October when the funds are deposited into your savings and the shopping can begin. We also offer Secondary Savings, Money Markets and IRAs. Review our Rate Sheet to find the specifics on each account and the current rates.

Article written by Michelle Niewald for CUNA Guides to Money enhanced by Credit Union of Denver.