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Best Options For Credit Card Debt Help

Best Options For Credit Card Debt Help

credit card debt
Did you know the average American owns 8 credit cards? Average American debt grows higher and higher every year. If you are one of the many millions who carry a high amount of revolving debt from month to month, getting out of the debt cycle can seem impossible. Experts advise us not to carry a credit card balance at all to avoid interest and fees, but sometimes it’s just not practical. One lost job or medical emergency can send all well intentioned goals to the wind. So what can the consumer do to get credit card debt help that actually, well, helps? The good news is that there are several options available to the debtor.

The simplest way to pay down your revolving debt is to overpay the balance every month. This is easy to do and doesn’t have to involve any sort of middle man. The problem with this solution, is actually the fact that the credit card issuer will apply any extra funds to your interest on the balance instead of the principal. If you’ve missed a payment or two you may also find that the interest rate has skyrocketed to an outrageous figure. One bank actually charges an astonishing 49.9% APR to all balances. It doesn’t help to pay all that extra money into an ever increasing interest rate right? So what are the other options available?

If your credit score is still good, usually in the 700 range, you may want to look into consolidating your credit card debt into one single loan at a much lower interest rate. Apply for a fixed term, low interest rate loan and pay off the credit card debt you have all in one go. Banks and credit unions are able to help you in this area. Make sure you shop around to make sure you get the best deal for your needs. If your credit score isn’t quite so stellar, you may want to consider calling your credit card issuer directly and negotiating a lower interest rate with them. Most are willing to help their consumers with their payment needs.

If your debt is becoming completely unmanageable, your next step would be to contact a credit counseling agency. The way these work are to take your balances and work with the credit agencies as a third party entity. Their arrangement with credit card issuers allows them to negotiate lower rates on your behalf and pay more towards the principal balances you owe. Make sure you do your due diligence before signing on with any company. Check references and any industry standards they adhere to. The last two options we’ll discuss are settlement directly with credit card companies and filing bankruptcy. Settling directly with a creditor is usually done through a company that specializes in this technique. They contact creditors on your behalf and negotiate an amount to settle (or close) your account. Payments are made through a savings account you have with the company.

Bankruptcy. Only use this option as your last resort for credit card debt. It can help you if you owe a very large sum of money and have tried other methods that are now not working for you. There are two types, Chapter 7 and Chapter 13. Both require a competent and knowledgeable attorney to handle your case. Seek references and ask lots of questions. All states have different filing and debt counseling requirement attached to them. Again, it’s advised that you seek knowledgeable legal counsel.

Successful credit card debt help is out there, but you need to take action to see results. Consider each and decide which one fits your financial profile best.

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Steps You Can Take With Credit Card Help

Want to fix it yourself? There’s a tool for that. Change your oil? There’s a store for that. How about repairing your credit card debt? Yep, you guessed it, there’s a tool for that. Several in fact. Debtors can feel good and empowered about getting the information they need without having to call in the big guns. But, if you want to call in the big guns you can do that too. Here are 5 steps you can take to put yourself ahead of the game when it comes to your credit card debt.

Some of these steps seem simple, but are often overlooked. Don’t skip them, you need to see the big picture to repair the little details. If you want to get ahead of the ever growing mountain of debt, then buckle down and follow each step diligently.

1. Step number one. Write down on a piece of paper or spreadsheet ALL the money you owe. This includes your monthly expenses like coffees at Starbucks or Sunday newspapers, as well as your credit card balances. Some may even find it helpful to jot down what they spend each day in a small notebook. Total everything at the end of the month. Seeing spending in black and white can be true revelation.
2. Funnel any frivolous spending towards paying down your debt instead of wasting it. Do you really need that extra, extra, extra, triple shot, vanilla chai soy latte every day? No, didn’t think so. Most experts agree that you should pay down the smallest balance first, then take that money and snowball it into your next smallest balance, and so on and so forth. Personally, I think this is the best way to pay down balances. If I see my debt paid from extra funds in a few months, do you think I’m going to be motivated? You bet.
3. Call your creditors and request a lower interest rate. Now, this sometimes does not work if you have been late on payments in the past. Most companies however want to get paid, so they will issue a temporary (sometimes permanent) lower interest rate on your account. You may also consider transferring a balance from a higher rate card to a lower rate card. Be careful though, juggling balances and interest rates can sometimes have a negative effect on your credit score overall.
4. If you find you’re still having difficulty contacting your creditors directly to negotiate, then you will want to look into a debt consolidation loan. This can work in your favor and help boost how quickly you pay down your debt. Most banks and credit unions offer a personal or credit loan that have lower interest rates than the credit card companies offer. You can pay off all your balances with one loan and avoid all the interest and fees headache you get with credit cards.
5. As a last resort, you may be able to negotiate a settlement on your account with the creditor. They will offer an amount they feel is reasonable to settle and close your account. There is no guarantee that your creditors will do this for you, but if you are lucky enough to have an understanding creditor, you can negotiate an amount that is quite a bit lower than the amount you currently owe on your account. You can also hire a debt negotiation company on your behalf to do the dirty work for you.

Repairing credit card debt by yourself is absolutely doable, just make sure you are prepared and know what the big picture before diving into a method. Follow through and you should be debt free and on the road to financial freedom in no time falt!

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