According to DTN/Progressive Farmer, there are many farmers who are finding out that lenders they counted on in the past for financing are no longer going to do so. Also, many farmers have been forced to restructure their loans, when possible, for a longer-term. This has led to the situation in 2019 when farmers need to pay the rent for their rented land but will not have the financing to be able to produce crops on the land.
Even before the trade wars and bad weather hit, farmers were struggling under more international competition, with more countries exporting agricultural products worldwide. The Washington Post reported that Trump’s farm assistance to help farmers through the trade war is mostly benefiting the large farms, and little assistance is being provided to small farms.
DTN also reported that the well-known farmer assistance organization, Farm Aid, had to double its staff to handle crisis calls from farmers.
Other farmers have had to resort to massive credit card debt in order to pay for their farm expenses, so they could keep their farms in operation. This is what can happen when other credit sources dry up.
Here at Grand Canyon Advisors, we field calls from farmers who have been buffeted by bad weather and tariff wars. They got into some credit card debt and are looking for answers as to how to pay off their credit cards. The following provides some tips on how to whittle down your credit card debt.
Why Avoid Credit Card Debt
There is some really great advice from SuccessfulFarming Magazine. It states that the best advice about credit card debt is to never get into it at all. In fact, they suggest the scary prospect of taking out home equity loans over credit card debt. Their reasoning? Credit card debt is at and above 20 percent now. The editors know that it gets really hard to pay off that debt at such exorbitant interest rates. Home equity lines are averaging around 3 percent.
Those home equity lines, though, are a real danger because you can lose your house if you default due to flooding or bad weather events.
How to Pay Down the Credit Card Debt
Lower Expenses
You may have unused farm equipment that you can sell to pay off the debt or at least lower the balance.
Reach Out to Farm Aid
You are the backbone of the country. That is why the non-profit organization, Farm Aid, was created. The goal is to keep you on your land, producing food for our nation. It is okay to reach out for help. They provide emotional, financial and legislative advocacy support.
Pay Off the Highest Interest Card First
As you pay down the credit card debt, pay down the card with the highest interest rate first. That will provide you more funds for attacking the next credit card.
Lower Your Interest Rate
The interest rates charged on those credit cards these days are absolutely unfair. A debt consolidation loan can help you consolidate credit card debts with one monthly payment at a lower interest rate. That will help with your liquidity. Also, credit card debt can just go on and on. A debt consolidation loan will have a pay-off date.
If you are a farmer that is struggling under high-interest credit card debt, call us at Grand Canyon Advisors. We have solutions for people who are struggling with debt