As a past or present military service member, several unavoidable factors can take a toll on your finances, and in many ways, they can make you more vulnerable to significant credit card debt and a poor credit score than your non-military friends and family members. Fortunately, there are options available to help you repair your credit and get your credit card debt back under control.
The National Foundation for Credit Counseling found that the average service member or veteran who seeks help for debt consolidation or credit counseling had about $10,000 in debt. They also found that many of these same people – in fact, about 60% – relied on payday loans to help get from one paycheck to the next. Per the Department of Defense, however, 73% of military members check their credit regularly, 87% create and use a monthly budget, and almost half have at least three months’ worth of emergency funds set aside.
Despite these facts, however, numerous active duty military members and their families struggle with debt. In some cases, frequent relocations can take a toll on their budgets and savings. In others, the spouse’s inability to find and maintain employment due to those relocations can wreak havoc on their finances. Some service members who enter the military at a very young age simply struggle with financial inexperience. These things can all lead to significant debt and poor credit scores.
There are several ways in which you can improve your financial situation, and this is especially true if you have a VA loan on your home since it qualifies you for a Military Debt Consolidation Loan, or MDCL. Essentially, it allows you to take out one lump-sum loan to cover all your outstanding unsecured debt, then make single payments to the lender rather than multiple loan payments to their respective creditors. These loans can save you a great deal of money on interest, and when you work with a team of professionals, you can negotiate repayment terms that fit your budget. You might also consider transferring your credit card debt to a new credit card offering 0% interest on balance transfers for as long as 18 months.
Of course, while MDCL loans and zero-interest credit cards can certainly help you get back on track, it will take some time to see your credit score begin to rise, and it is important that you receive the financial education you need to make better decisions regarding your money in the future. Options include debt management programs designed to help repair your credit and options for refinancing your credit card debt to save hundreds or even thousands of dollars in interest over time.
Being in the military can be tough on your finances, especially if your family moves around often or your spouse struggles to find and keep employment between moves. No matter the situation, there are credit repair and credit card debt consolidation options for military members and veterans that improve your credit score and help you live a happier, more comfortable life.