Probably most people who are finding that substantial credit card debt is proving difficult to manage will not care to dig very deeply into this topic. Such is the nature of denial. We'd prefer simply to ignore any examination of signs that we may be compulsive and out of control around money. It's too painful to contemplate.
Indeed, most who have dysfunctional and compulsive tendencies when it comes to money will not begin to look closely at their debting behavior until it reaches crisis proportions. Only then, as panic begins to take over, will a degree of willingness to examine one's relationship to money, personal finances and debt begin to creep in.
Often, the first impulse when a personal financial crisis erupts is to blame others and assume the role of a victim. Obviously, this offers no solution, and probably will compound the dilemma. Next, some willingness to seek debt help may occur, and the debtor then looks at the possibilities of borrowing from family or friends, thus dragging others into the problem who don't deserve it.
If that fails to work, alternatives such as debt consolidation, refinancing a mortgage and even bankruptcy are considered. These measures can reduce debt and provide some relief, but always fail to address an underlying problem of compulsive debting.
If you find yourself in this situation, there are a number of clear signs that you may be a compulsive debtor. Here are a few questions you might ask yourself:
1. Is it difficult for you to pass up buying something on credit because it's a really good deal?
2. Does having the ability to whip out a credit card for purchases give you an ego boost, a feeling of being accepted, like being grown up or a member of a privileged club?
3. Are you using one credit card to pay off another?
4. Do you bounce checks from time to time?
5. Are you having problems meeting just ordinary personal expenses, and do you get a feeling of accomplishment when these obligations are satisfied?
6. Do you live in drama and chaos when it comes to money, continually having a crisis to deal with?
7. Are you vague about your personal finances, not being clear about how much you owe, your monthly expenses, interest rates and the like?
There are a number of other indicators, but, if you answered several of these questions affirmatively, then you may be a compulsive debtor. Debt relief will evade you until you get a grip on the belief systems and behavior underlying your money problems. Credit counseling is probably in order, and you might benefit from a spiritual program such as Debtors Anonymous.
Monday, May 12, 2008
Will I Ever Get It Paid?
Credit Card Debt - Just Say No!
Temptation. The world is loaded with it. As soon as you turn 18 the debt peddlers start their campaigns. It looks like such a great life, filled with fabulous vacations, fine clothes and lavish meals. Smiling happy people who just can't wait to be -- in debt up to their eyeballs. Thats right. The credit card companies offered and you accepted, and now your stuck too deep in credit card debt to afford all the things they promised you. Will you ever get out of credit card debt? You can! But you have to make a plan and stick with it. You can be completely free of credit card debt, and have good credit. It takes patience and work. But you can do it.
Ok, enough of the RA RA cheer leading. You want facts. How can you get out of credit card debt when your minimum payment is not enough to even cover the interest? There are a few ways of getting the debt paid down in a reasonable amount of time. So lets cover just a couple.
Put all your debt on a new card.
This is actually one of my favorite methods, but it requires that you still have good credit and that you get a good deal on the new card. Many credit card issuers offer zero percent or extremely low rates on balance transfers. This is a strategy that is great, builds your credit score and saves you money. It comes with a warning though. It requires discipline. To get out of credit card debt using this technique, you must be diligent about not incurring any further credit card debt. Once you pay off the old cards, get rid of them. I mean destroy them, don't just hide them in a drawer somewhere. In fact, it isn't a bad idea to destroy the new card when they send it to you. Now, you have no way to run up more credit card debt, you have a lower interest rate, you only have one payment, you haven't transferred your debt to your mortgage. Its really a win, win situation in every area.
There are also credit management services.
This is an o.k. method, sometimes. It also allows you to make one payment, to one entity, that distributes the payment to all of your creditors. The amount you pay monthly is based on your income. If you are overloaded with credit card debt, this is an option. These services have helped a lot of people, and in some cases using these companies is better than just getting another credit card, and running the risk of just running up another credit card debt on a new card. My main problem with these services is that many, in fact I believe MOST, are rip offs. They charge exorbitant fees for their services. In many cases very little of what you initially pay goes to paying down the credit card debt. Much of your payment, at least initially, just goes to the company. So be careful if you go this route. Check with the Better Business Bureau.
Pay off the debt slowly.
Well, this is the usual method. It is sometimes called the "debt snowball". Pay minimum payments on all but one card. Make a higher payment on that card until its paid, and then start paying down the next card. Start out with the card that has the highest interest rate, or the lowest balance. Either way, this method begins the process of getting the debt down to a manageable level. It actually gets the credit card debt paid down pretty quickly if you use it correctly.
Lets say you have three credit cards, each with a $25 dollar minimum payment. Your total monthly payments are $75. Lets also assume that you can afford to pay an additional $25 to pay down your debt. On two of the cards, you would continue to pay the $25 minimum monthly payment, on the third credit card you would make the $25 dollar minimum plus the extra $25 for a total of $50. When that credit card is paid, you would have $50 to apply to the next credit card. So you would make a payment of the $25 minimum, plus the additional $50 for a total payment of $75. As you pay off each credit card, the amount that you are able to apply to the next credit card increases until you are out of credit card debt.
Many people are able to get their credit card debt paid off in a few months with this method. Pick the one that's right for you and get started. The sooner you get going, the sooner you will be out of debt.
Temptation. The world is loaded with it. As soon as you turn 18 the debt peddlers start their campaigns. It looks like such a great life, filled with fabulous vacations, fine clothes and lavish meals. Smiling happy people who just can't wait to be -- in debt up to their eyeballs. Thats right. The credit card companies offered and you accepted, and now your stuck too deep in credit card debt to afford all the things they promised you. Will you ever get out of credit card debt? You can! But you have to make a plan and stick with it. You can be completely free of credit card debt, and have good credit. It takes patience and work. But you can do it.
Ok, enough of the RA RA cheer leading. You want facts. How can you get out of credit card debt when your minimum payment is not enough to even cover the interest? There are a few ways of getting the debt paid down in a reasonable amount of time. So lets cover just a couple.
Put all your debt on a new card.
This is actually one of my favorite methods, but it requires that you still have good credit and that you get a good deal on the new card. Many credit card issuers offer zero percent or extremely low rates on balance transfers. This is a strategy that is great, builds your credit score and saves you money. It comes with a warning though. It requires discipline. To get out of credit card debt using this technique, you must be diligent about not incurring any further credit card debt. Once you pay off the old cards, get rid of them. I mean destroy them, don't just hide them in a drawer somewhere. In fact, it isn't a bad idea to destroy the new card when they send it to you. Now, you have no way to run up more credit card debt, you have a lower interest rate, you only have one payment, you haven't transferred your debt to your mortgage. Its really a win, win situation in every area.
There are also credit management services.
This is an o.k. method, sometimes. It also allows you to make one payment, to one entity, that distributes the payment to all of your creditors. The amount you pay monthly is based on your income. If you are overloaded with credit card debt, this is an option. These services have helped a lot of people, and in some cases using these companies is better than just getting another credit card, and running the risk of just running up another credit card debt on a new card. My main problem with these services is that many, in fact I believe MOST, are rip offs. They charge exorbitant fees for their services. In many cases very little of what you initially pay goes to paying down the credit card debt. Much of your payment, at least initially, just goes to the company. So be careful if you go this route. Check with the Better Business Bureau.
Pay off the debt slowly.
Well, this is the usual method. It is sometimes called the "debt snowball". Pay minimum payments on all but one card. Make a higher payment on that card until its paid, and then start paying down the next card. Start out with the card that has the highest interest rate, or the lowest balance. Either way, this method begins the process of getting the debt down to a manageable level. It actually gets the credit card debt paid down pretty quickly if you use it correctly.
Lets say you have three credit cards, each with a $25 dollar minimum payment. Your total monthly payments are $75. Lets also assume that you can afford to pay an additional $25 to pay down your debt. On two of the cards, you would continue to pay the $25 minimum monthly payment, on the third credit card you would make the $25 dollar minimum plus the extra $25 for a total of $50. When that credit card is paid, you would have $50 to apply to the next credit card. So you would make a payment of the $25 minimum, plus the additional $50 for a total payment of $75. As you pay off each credit card, the amount that you are able to apply to the next credit card increases until you are out of credit card debt.
Many people are able to get their credit card debt paid off in a few months with this method. Pick the one that's right for you and get started. The sooner you get going, the sooner you will be out of debt.
Wednesday, March 26, 2008
Credit Card Debt Elimination Programme
If you are one of the millions of Americans currently struggling with excess credit card debt, you should consider requesting a free online debt consolidation quote. By requesting a quote you will be able to instantly find out exactly how much a qualified program could potentially save you each month.
What is Debt Consolidation?
Consolidation programs are designed to help get you out of debt for good. All of your current balances with high interest will be eliminated and replaced with one lower monthly payment, with a much lower interest rate. Lower interest means you pay less each month, leaving you more money to apply towards gaining financial freedom and avoiding further debt.
In some cases you will not even need to receive another loan, instead, your agent will work with your lenders to develop a reduced payment plan, lower interest rates, and even lower you balances. The easiest way to learn which program is right for your needs is to request several quotes from different companies and see what they suggest.
How do I Find the Best Loan?
The good news: there are countless companies, many on the internet, who offer debt elimination services. The bad news: with so many companies out there, shopping for the one who will save you the most money can be a bit overwhelming. Relax, it's actually quite simple! The fastest, most efficient way to find the right service for your needs, is to compare free quotes online. You'll see exactly how much each service will save you, making it easy to decide whether debt consolidation is right for you.
What is Debt Consolidation?
Consolidation programs are designed to help get you out of debt for good. All of your current balances with high interest will be eliminated and replaced with one lower monthly payment, with a much lower interest rate. Lower interest means you pay less each month, leaving you more money to apply towards gaining financial freedom and avoiding further debt.
In some cases you will not even need to receive another loan, instead, your agent will work with your lenders to develop a reduced payment plan, lower interest rates, and even lower you balances. The easiest way to learn which program is right for your needs is to request several quotes from different companies and see what they suggest.
How do I Find the Best Loan?
The good news: there are countless companies, many on the internet, who offer debt elimination services. The bad news: with so many companies out there, shopping for the one who will save you the most money can be a bit overwhelming. Relax, it's actually quite simple! The fastest, most efficient way to find the right service for your needs, is to compare free quotes online. You'll see exactly how much each service will save you, making it easy to decide whether debt consolidation is right for you.
Information On Credit Card Debts
Today across the country people are saying, "I want to reduce my credit card debt." But they're not sure of the best way to do so. To make matters worse, there seems to be an overload of credit card debt info that can be confusing and misleading.
Credit card companies are to blame for much of this misinformation with their balance transfer offers, teaser interest rates, and sneaky late fees. If it were up to them, they'd have you in debt forever!
Here are 3 debt cures they don't want you to know about. Use this simple formula to pay off your debt and get your life back in order:
1. Control your urge to spend.
If you want to eliminate your debt, the first step is to not create more of it. This will help by preventing on accumulation of further debt. Stay away from attractive offers that stores use to put you further in debt while increasing their bottom line.
2. Leave your credit card at home.
Prepare a monthly budget that will allow you to live without credit. Use cash or checks for your purchases. If you feel the urge to use plastic, then use a debit card instead. Also, if you feel that something is a (true) need then go get your credit card at your house. By the time you go home, you'll probably realize that it wasn't a true need after all.
3. Make a plan to be debt free.
In order to do this, you need to pay off your existing debts. Here is the best way to get started.
a. First, make a list of all of your debts and add them up.
b. Next, list the balances of each debt and add them together.
c. After that, divide each debt by your minimum monthly payment. This will give you an estimate of how many months it will take you to pay it off.
d. Find a way to reduce expenses and apply the savings to your first debt. Generally speaking, it's best to pay off the debt with the smallest balance.
e. After your first debt has been completely paid off, roll the entire amount into the second debt.
f. Keep this rolling process up until you experience the debt relief you desire.
So there is no need to be confused about all of the credit card debt info out there. If you are playing by "their" rules, you'll give up to 75% of you future income to them! Use these 3 debt cures they don't want you to know about to make up your own plan for the future.
Credit card companies are to blame for much of this misinformation with their balance transfer offers, teaser interest rates, and sneaky late fees. If it were up to them, they'd have you in debt forever!
Here are 3 debt cures they don't want you to know about. Use this simple formula to pay off your debt and get your life back in order:
1. Control your urge to spend.
If you want to eliminate your debt, the first step is to not create more of it. This will help by preventing on accumulation of further debt. Stay away from attractive offers that stores use to put you further in debt while increasing their bottom line.
2. Leave your credit card at home.
Prepare a monthly budget that will allow you to live without credit. Use cash or checks for your purchases. If you feel the urge to use plastic, then use a debit card instead. Also, if you feel that something is a (true) need then go get your credit card at your house. By the time you go home, you'll probably realize that it wasn't a true need after all.
3. Make a plan to be debt free.
In order to do this, you need to pay off your existing debts. Here is the best way to get started.
a. First, make a list of all of your debts and add them up.
b. Next, list the balances of each debt and add them together.
c. After that, divide each debt by your minimum monthly payment. This will give you an estimate of how many months it will take you to pay it off.
d. Find a way to reduce expenses and apply the savings to your first debt. Generally speaking, it's best to pay off the debt with the smallest balance.
e. After your first debt has been completely paid off, roll the entire amount into the second debt.
f. Keep this rolling process up until you experience the debt relief you desire.
So there is no need to be confused about all of the credit card debt info out there. If you are playing by "their" rules, you'll give up to 75% of you future income to them! Use these 3 debt cures they don't want you to know about to make up your own plan for the future.
Friday, February 29, 2008
Credit Card Debt Management Services And Guidance
Credit cards and loans have become an integral part of our lives and more and more people are giving in to the temptation of 'buy now pay later' schemes. However, the only people who seem to be happy with the scenario are the credit card companies. An individual who has piled up a large sum of money in the form of loans can be in a sticky situation if for some reason or the other he is unable to repay his credit card debts. Managing your finances to repay your debt can be a real balancing act and people often fall flat while trying to perfect this act. The only feasible option seems to be to take further loans to repay the existing ones and soon the individual is dragged into this vicious circle. A more apt solution in this case would be to opt for credit card debt management services form a reliable and reputable company that has helped many other debtors to come out of their debts easily.
A company offering credit card debt management services is your best option to get a friend, philosopher and guide who can get you out of a messy situation. When creditors and collectors start harassing you and your family for the repayment of various credit loans, it can be a living nightmare. Avoid such unpleasant situations by applying for credit card debt management services that not only help you repay all your debts but also provide guidance to manage your finances in a better manner. The financial experts involved with providing you expert guidance on handling your credit card debts, will firstly analyze your financial situation and ability to pay back the debts. Accordingly, they negotiate on your behalf with the creditors to reduce or freeze the interest and charges on your debts.
Once your multiple debts have been consolidated under a single, affordable payment, then the credit card debt management advice helps you get rid of your debts easily. You now simply have to pay a fixed, monthly installment that goes towards all your debts at a go and you actually see your principal debt amount reducing rather than just the interest. Also, credit card debt management lets you have a greater amount of expendable income at the end of each month that you can contribute towards your family responsibility and expenses.
Once you opt for credit card debt management you can get the required moral and financial support that is crucial to any debtor at times like this. You may also secure a loan at a much lower rate of interest that will help you pay back the loan on all your credit cards at one go. Whatever may be the option you select, ensure that you are seeking guidance and help from a reputed and reliable debt management company. The yellow pages, the internet or past clients of the company are your best referrals. Opt for credit card debt management services and lead a secure, comfortable, debt free existence from then on.
Credit Card Used As Useful Weapons And Debt Relief Services
Let me say right from the start that this is not a credit card company bashing article, however, it has to be said that many people in the western world are struggling with credit card debt to a degree that some have taken their own lives or become bankrupts. It does not have to be that way and credit cards do not need to be the enemy.
Credit cards can be extremely useful weapons in your financial armoury, used sensibly and correctly they can actually save you money. The added insurances and benefits gained from using a credit card on large purchases such as holidays and furniture or vehicles can be worth a lot. In this respect paying for a holiday (for instance) on a credit card that offers holiday insurance and cancellation insurance for holidays paid for on the card can save you a lot in holiday insurance. If you have saved to pay for your holiday or other large purchase it is advisable to pay for it with your card and pay the money you saved to your card to avoid interest charges. This is also useful as very often the insurance products offered by your card are superior to those being sold by your travel agent. Do this and you not only have 56 days interest free credit and the peace of mind of the insurance cover but you have just saved yourself anything from $40 - $200 on additional products.
They also offer a convenience that is very attractive and these days of course they make a simple way to pay for goods and services online.
Now we have established that credit cards are not evil lets talk about when things go wrong.
Interest rates on credit cards can often appear low, however when you look closely you see that over a long term they are anything but. For short term borrowing they are not too bad but start stretching those payments out and it can become a nightmare. Paying only the minimum repayments asked for by the card company is a mistake, for instance if you have a credit card with $3000 outstanding on it with an interest rate of 17.9% (average for cards) then making only the minimum repayments every month will take over 40 years to clear that $3000 - that is longer than it takes to pay for the average house. Not only that you will have paid over $6000 in interest, suddenly that 17.9% interest rate does not seem so decent. This is because each month you pay the minimum payment some money (a small amount) will come off the $3000 and the rest pays that months interest. In the scenario above approximately $16 of the $60 minimum repayment would be used to reduce the debt, so the following month you owe $2984 which is less than the previous month so you will pay a smaller minimum payment of just $59.68 with even less coming off your outstanding debt, so what can we do about this.
1. Always Clear The Balance Every Month.
Not always possible and certainly not if you are struggling to make the minimum repayments. However this is certainly the cheapest way to use a credit card.
2. Reduce the Interest You Have To Pay
This can be done several ways. Firstly if you have good credit standing then you should shop around and get a card offering 0% on balance transfers for the longest period possible and keep doing this at the end of any interest free period. You could also get a cheaper loan from the bank to reduce the amount of interest you have to pay. The likeliest scenario of course is that you are paying the minimum payments as you can not afford to pay any more, if that is the case then consider this; by paying the first month minimum payment at $60 and then instead of paying the slightly reduced minimum payment the next month you just keep paying at $60 per month always the impact on your debt is remarkable. The time taken to pay off the $3000 has reduced by over 33 years to just 7 years and the interest has reduced over $4000 to just over $2000. Of course any increase in you monthly payment can reduce this even further, pay an extra $20 per month and the time reduces to just 4 years 7 months and the interest will only be $1250.
2. Stop Using the Card Immediately
Sounds simple, however many people pay off a payment every month and then use it again to the limit. You will never clear any debt this way and it bears saying as a reminder.
3. Contact Your Card Issuer
If you are really struggling with making the repayments on a card then please contact your card issuer as soon as possible. It is often possible that while blocking the use of your card to avoid further debt they will come to a repayment arrangement with reduced interest terms for a short period to help you out. If they do not know you are having difficulty they cannot help.
If your credit rating will not allow you to follow the techniques described you should visit the website in my signature link to address the problem and repair or re instate your credit score. Credit repair is possible and can help you to regain your standing with credit companies.
Credit cards in themselves should be used as detailed above for convenience and for the benefits they can provide, they should not be used as a form of borrowing to help you live day to day. You can only benefit from the use of credit cards as part of an overall financial plan and budget.
I used to have multiple serious bad debt and an appalling credit history and credit score. I have been through the mill and around the block several times and now through hard work, study and perserverance i understand the credit system and bad debt in a way only someone who has been there can. My pet hate is credit repair and debt consolidation companies who want to rip vulnerable people off by selling them a service that is not only simple to do by yourself but you achieve better results. All thats needed is some information, encouragement and knowledge!
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