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Are You Robbing Visa To Pay Mastercard?

I spent several years working as an insolvency advisor for people whose debt had become so unmanageable that they had to file for bankruptcy, and it would always surprise me at how long some of my clients ignored their growing debts before seeking help.

Often this was due to two reasons:

  • They were too embarrassed about their situation and refused to get help.
  • They were waiting in hope that their financial situation would improve by itself and in the meantime continued to borrow, in order to maintain repayments, as they viewed that as a short-term solution.

It’s often the case that some wait until the creditors are breathing down their necks and sending over bailiffs before truly realizing the gravity of the situation – and by then there’s little that can be done that doesn’t require drastic action.

William Penn said, “Time is what we want most, but what we use worst”, and when we’re talking about dealing with debt I couldn’t agree more. Part of managing your debt is coming to terms with your situation and being honest with yourself. It’s not an easy thing to do and it takes courage.

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Waiting not only delays the inevitable, but makes the prospect of quickly recovering your former credit status next to impossible. The implications of this can be felt for many years afterwards.

The infographic below from theWalletDoctor.com highlights the typical cycle that the majority of debtors go through. Over 63% of people in debt don’t seek help within adequate time and furthermore, many don’t realize that the help they needed was available to them for free the whole time.

Are You Robbing Visa To Pay Mastercard? debt 2

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Are You Robbing Visa To Pay Mastercard? debt 2

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20 comments

  1. I really connected with the 40% stat about knowing something was wrong before getting help. The denial is tough,..”this pay cheque will be different”… and it rarely is.
    Alicia recently posted..Troubleshoot my Personal Finances.My Profile

  2. Ouch! Being self-employed, I couldn’t imagine having more debt than those who’re not. It’s also sad to see that older individuals have more unsecured debt. It’s bad enough when you’ve not saved enough for retirement, having debt is something else altogether.
    John S @ Frugal Rules recently posted..How to Reduce Your Stress Level During the HolidaysMy Profile

  3. I lived this for thirteen years. I always thought the next salary increase would be the one that would allow us to pay down our debt. All it did was allow us to keep up with the growing minimum payments on our credit cards. The good news is that there IS help…in a variety of ways. People just don’t know what their options are – it’s much easier to deal with sooner than later. Because it was REALLY hard waiting until later.
    Travis @Debtchronicles recently posted..Comment on My New “Celebrating Financial Freedom” Course! by shana brownMy Profile

  4. The fact that unemployment redundancy and reduced income are the main drivers of debt should be telling. I think most people are living paycheck to paycheck and would have trouble getting by if they lost their job or had to take a significant paycut. Hopefully infographics like this motivate people to make more and spend less.
    DC @ Young Adult Money recently posted..5 Ways to “Get” Money this Holiday SeasonMy Profile

  5. Grayson, I’m loving this info graphic. Especially since it points out how much money payday loans really cost…uggg I hate those things! Thanks man!

  6. Denial is really hard. Most people don’t want to believe and except the fact that they need a lot of help. Then it gets to a point where its almost to late. sad.
    Tanya recently posted..Online HR Software – December 2013 UpdateMy Profile

  7. “The burden of debt doesn’t shift by itself – act now!” LOVE that quote. We started the year with a 65% DTI, and decided that it was time to get rid of that burden of debt, and what a relief it’s been! Not easy, by any stretch of the imagination, but the debt numbers are decreasing and the savings account is increasing, so we’re on the right path.
    Laurie @thefrugalfafmer recently posted..How to Save Money on Your Electricity Bill During the Winter MonthsMy Profile

  8. I think people are too busy finding money than really thinking on the real problem on how to solve it.

  9. A big thank you to Grayson for posting the infographic I made.
    I did find a lot of troubling statistics regarding under-25 year olds in debt, but there’s so much to cover that I will have to make it as a separate infograph
    Leonard @ the Wallet Doctor recently posted..Consumer Debt – It’s a Matter of TimingMy Profile

  10. 5000% APR? Are these people insane? I think I’d rather work all 168 hours per week instead of sign myself up for 5000% APR.
    Mr Financial Debauchery recently posted..How Much Is Gold Worth? More Than What a Dealer Will Give You!My Profile

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