Consolidating debt for military
When you leave active duty, though, standard interest rates kick in.Credit card rates are usually well into the double-digits, so interest charges can pile up quickly.That’s why you see so many payday lender storefronts with flashing signs outside the gates of military bases.They won’t tell you thata debt consolidation loan or personal loan with lower interest rates might be the best route to solvency.If you are an infantryman in Afghanistan or a civilian in Topeka,debt consolidation – whether it’s a personal loan, a debt management program or in the most severe instances, bankruptcy – can ease the strain. Article 134 of the Uniform Code of Military Justice spells it out – Service members who don’t pay their bills “bring discredit upon the armed forces.” They can lose their security clearances, promotions and even face court martial if they fail to live up to their financial obligations.There is no financial strain quite like military financial strain, but there is help. Despite such consequences, 36% of military service members have trouble paying monthly bills, according to a study by the Financial Industry Regulatory Authority (FINRA).Every situation is unique and you have to decide if this is the right way to get out of debt for you.The main benefit to this method is getting a fixed or lower interest rate lowering the overall amount you have to pay back.
Debt consolidation like this will help you manage having so many open lines of credit but depending your terms you may end up paying on the debt for a longer period of time.
If it’s a brand-new credit card, there might be a very low rate that can lead to favorable monthly payments.
However, all too often that rate is simply an introductory rate, which will reset to a much higher rate after a certain amount of time—or if you are late on payment!
Be sure to check the fine print of your credit card to make sure you know all of the fees and rules, and try not to just roll debt over from card to card to card.
It’s far too easy to wind up using the “rollover” card and ring up even more debt!
When you were on active duty, lenders may have ignored your credit score—which is an indication of how well you handle your debts—because of your relationship to the military.