Bills.com Co-Founder, Brad Stroh, speaks on CNN on how to tackle credit card balances and get debt relief fast.
Bills.com co-founder, Brad Stroh, speaks on CNN’s “Open House” hosted by Gerri Willis. The topics of conversation include credit card debt and how to tackle credit card balances and get debt relief fast. Making only minimum payments can be a trap most consumers can fall into. This video will help consumers with some helpful tips on how to avoid excess debt.
Hello, I am Gerri Willis and this is open house, the show that saves you money. Still ahead on open house how to tackle those credit card balances and get out of debt for good, we will show you how. Home values declining and consumer debt in the billions you may be worried about your spending this holiday season and if you are already in debt or concerned about racking up more you will want to listen to our next guest. Brad Stroh, is the founder and CEO of Bills.com in San Francisco. Brad welcome.
“Thanks Jerry good to be with you. ”
You know you say like so many experts say, look don’t make the minimum payment on your credit card.
“I think that’s right you know that’s a trap that a lot of consumers get lured into and it essentially means you’re not taking control of your own consumer financial situation. ”
You got to pay more more more right?
“What you really want to do is pay off the balances as quickly as possible. You know a good data point is if you have twenty thousand dollars of credit card debt and you’re just making the minimum monthly payments, that could take you ten or fifteen years to pay off. And if you instead had invested that money at a ten percent rate of return in fifteen years you’d have half a million dollars, so get out of those debt balances as quickly as possible. ”
You know the other interesting thing that people do is they get in to the habit of rolling over credit card debt to credit cards that don’t have any interest rate, the zero percent offers, is that a good idea?
“Yes, so it is really enticing because you know the lower monthly payment makes it seems like a short term gain. What we advise consumers if you don’t have the ability to pay the balances off in full be very careful playing that pyramid scheme. What we really want to do is get disciplined and figure out a way to, with your own cash flow, pay those balances off. If you have a lot of financial stability then teaser rates and balance transfer advances can benefit you in the short term but be very careful not to compound the problem by adding on additional credit card debt. ”
Brad, what is your rule of thumb for spending in the holiday season.
“So the estimates are that the average American adult will spend about nine hundred dollars on their loved ones around the holiday season. If you have the financial wherewithal, that’s terrific and the holiday season is a great time to spend time and spend money on your loved ones. If you are in financial distress or on the precipice of financial distress be very careful about compounding your problem around the holidays. We’d advise people to instead of spending money, try to figure out clever ways to show people you love them without going into debt or causing them to go into debt themselves. ”
Hey it is not all about price tag, I mean, you can really give great gifts that you make yourself or some things that are just really creative, but you brought up financial distress when do you know that your debt problem is out of control?
“So, now more than ever I think this holiday season more than ever before is important to people they be very disciplined and pay close attention. If you are just making your minimum payments, as you mentioned earlier. If you are getting collection calls. If there is a lot of emotional distress around your credit card debt you’re probably right at the point where you need to seek help or get very disciplined about getting out of that debt problem as quickly as possible. ”
When do I search out a credit counselor?
“So there are a bunch of credit counseling or debt consolidation options. If you own your home and if you have equity in your home, you can always do a debt consolidation refinance loan. If you don’t qualify for that because of credit or you don’t have enough equity in your home or your you are a renter, you can look at non-profit credit counseling which lowers your monthly payment interest rates and is a way to cut your monthly payment and avoid falling off the precipice of a serious financial problem. You could also seek out solutions like debt settlement negotiations, which is a much more aggressive strategy that impacts your credit but will help you avoid bankruptcy or if you are really financially distressed and cannot afford anything, you seek the advice of a bankruptcy counselor. ”
Brad, great advice thanks for being with us today.
“Thanks Gerri, good to be with you. ”