Reducing Your Credit Card Debt

When you hear a credit card balance reduction ad, two facts will probably never be mentioned, and will mislead you about that credit reduction purpose.

You pay income tax on any amount of debt you reduce. Therefore, cutting that balance is not as simple as it may appear. Reduce your balance by $4,000 and it’s as if you had a taxable gain.

  Also, you hurt your credit standing by resorting to credit reduction. This may eventually cost you.

And, how many who have so much credit card debt they have to resort to drastic measures, are actually permanently getting out of debt? You can be sure their spending habits will be getting them into the same situation again in a few years. (See the Earl J. Weinreb NewsHole® comments.)