Credit cards are one of the leading causes of consumer debt. Unfortunately, 2005 bankruptcy reform laws made it harder than ever to reduce credit card debt through bankruptcy. Fortunately, you can still find a way out of debt if you’re committed. Credit counseling can help.
If you’re drowning in debt, you have to stop using your cards. Paying cash is the only way to get a true picture of how and where you spend money. Paying cash also curbs your spending because it feels like “real money.” Once you’ve reduced your spending, you’ll have more money to pay off the debts.
Start by cutting up your credit cards. Then contact your creditors and ask them to reduce your interest rates. You should also consider debt consolidation to further lower your interest rates and streamline your payments.
If that doesn’t help you begin to pay down your debt, then it’s time to get professional help from a credit counseling service.
Professional Credit Card Counseling
When you visit a credit counseling service, don’t expect a magic bullet that will eliminate your debts and allow you to keep spending the way you always have. Instead, you’ll be expected to change your spending habits and work had to pay off your debt. Most counselors will walk you through the following steps:
* Stop using credit cards. You can’t get out of debt while you continue to create new debt.
* Analyze your income and expenses. As the counselor goes over your budget with you, she’ll recommend places you can cut your spending to free up more money for debt payments. For example, she may suggest cancelling cable, eating out less, driving less, or not buying clothes, accessories, and entertainment products while you work on your debt.
* Create a debt solution. Most counselors will recommend one of three debt solutions: credit card consolidation, debt management, and debt settlement.
* With debt consolidation, the counselor will arrange for a personal or home equity loan that will be used to pay off your other debts. You’ll then have the responsibility of paying off the consolidation loan.
* With a debt management plan, all of your debts will be enrolled in a 2-4 year program. The counselor negotiates with your creditors to lower your interest rates. You then pay the service every month, which distributes the funds appropriately. You’re barred from using the cards or acquiring new debt while in the program.
* With debt settlement, your counselor will negotiate with your creditors to reduce the total balance due. This option is reserved for very serious situations because it will damage your credit history and credit score significantly. There may also be tax implications.
The solution recommended by the debt counselor depends largely on your current income, necessary expenses, and the size of your debt. Try to find the solution with the lowest fees and fastest resolution so that you can get out of debt and move forward with your new-debt free life.
You should also work hard to change your spending habits so that you don’t find yourself in debt again. Ask your counselor for educational materials about budgeting, money management, and financial planning. The credit counseling service may also offer free or low-cost classes on controlling even your required expenses, like groceries. The more you save on your expenses, the more you have to pay off those credit cards.
If you need to get your debt under control, and the DIY options aren’t right for you, contact a credit counseling service for help finding the best solution for you. You can get out of debt.
For more articles on credit card counseling, please visit: http://www.bills.com/credit-card-counseling/
Watch the video related to credit card consolidation
Help answer the question about credit card consolidation
About Author
Justin has 5 years of experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.
Great talent Der Mann.
Incredible! He looks so life like. Just amazing…and what a beautiful subject
A loan consolidation and a debt consolidation are the same. A bank loans you enough money to pay off credit cards or loans (like a car loan). They group it all into one single loan through them (hence the word "consolidation"). So they take all your outstanding "debt" and put it in one single loan with a fixed monthly payment.
A credit card consolidation can be one of two things:
First – You take a credit card and "transfer" the balances of all your other credit cards onto it. Then you have only one single credit card bill.
Second – A debt consolidation loan where you get a loan through a bank to pay off credit card debt. Sometimes the bank will want you to cancel the cards too. Not always.
Hope this helps!
I do not believe that using debt consoliation is a good plan. Personally I would not spend even $25 (it's usually 100s) of dollars for this kind of service that could be going towards the actual debt instead. Instead, I would work 3 jobs to pay these off.
The majority of people who do consolidations do not change their behavior, which is the main problem. You could be right back in the same boat.
See the source below for the hows of getting out of debt., This is not easy, and it is not a gimmick. I can testify that it works. Type in the "Baby Steps" in the search field to get started
Rarely do they help.
The fact is, you owe more money than you feel like you can pay. You have to change the very behavior that is causing it. The consolidation companies figure out what you owe, add one new (additional loan) to the mix (they loan you the money to pay the others off) and then they charge you more interest. They then go to the credit card companies and negotiate on your behalf for a lower rate, or better terms.
You end up just owing MORE people MORE money.
Does that sound like a way out of debt?
Not to anyone else either.
You have to change your life to change this behavior.
Start at the website below–but the real problem is that you are living beyond your means.
You need to increase your income (a second job, more hours, sell handicrafts); decrease expenses (spend less, move into a cheaper house/apartment); or sell assets (sell the car, and walk to work, hold a garage sale.)
Yeah, I know it hurts. But you haven't been in charge of your money–you've let it get in control of you.
Don't spend the rest of your life fighting against creditors. Take control now.
The website will help you to make some tough decisions, and give you some great advice–but it is HARD WORK.
There are no good credit consolidation companies, because none of them change your attitude towards your money. You must.
Brilliant Willy, Just Brilliant =D
:O
:O
:O
how is this not a real photo?
You’re really good man. You’ve got excellent talent.
Try http://personal-financial-help.solutionsarticles.com they aren't that bad (7% for me) and definitely quick.
The Idea is to find a loan at less interests than you pay now, and fixed interests.
Credit cards can have high interests so it shouldn't be difficult to beat them, depending on your credit score.
Whoever you go with, you should always check if they belong to the American Bankers Association at http://buyersguide.aba.com or at least the https://www.bbb.org the above people do.
Perfect.
The short answer is yes it will drop your credit score.
The better bet is to arrange to move all of your credit card debt to one low interest card. Then CUT up everything else, including the new card. Make no new charges and pay down as much of the credit card debt each month that you can afford. Going forward pay with everything with cash until you are out of debt, and stick to a budget. Then you can use your credit card, only when you can pay the balance off at the end of each month if you want to use a rewards program, or in the event of an emergency. Beyond that you need to only owe on your mortgage, and maybe a car payment if necessary.
woww that’s really relax and beatiful soung .good picture of jhony depp !
Nice work, you did pretty good.
I would suggest you try to find a local place where you can see someone face-to-face (as opposed to over the phone). A good, reputable non-profit is CCCS or Consumer Credit Counseling Services. They will set up an appointment with you and ask you to bring in a bunch of information: your last few pay stubs, all your bills and statements, a copy of your credit report (if you have one handy, if not, they can pull one), etc.
They will go over everything with you and let you know what they can do to help. They are not able to consolidate all bad debts, so be aware of that up front. They are nationally recognized, so they are able to negotiate pay offs for you as well as lower your interest rates on credit cards and the like. They can even change the terms (like the monthly payment). After they contact all your creditors, they take into account your monthly income and come up with a figure that will not stretch your budget beyond what you can afford. They will ask you to make a monthly payment to them and then they will divy up the money to the proper people.
After a month or two, it will show up on your credit report that certain accounts are "in consolidation". That is not a bad thing per se. Creditors can at least see that you are taking responsibility.
CCCS might also ask that you make a small donation since they are a non-profit. They've been known to waive the fee if you absolutely cannot afford it. One important thing to remember is that you cannot default on your agreement. It looks really bad credit-wise if you do…so just make sure you're ready to embark on the repayment. The length of time really depends on the severity of the debt (which looks fairly bad) and how much your monthly payments are.
I hope that helps and I wish you the best!
Very nice!!
Many people think that using a consolidation company is one step away from declaring bankruptcy. This is not necessarily true. Not every credit card company or lender of credit thinks this way; it's subjective. A consolidation company, for some people, is the best way to get out of debt.
STAY AWAY from any "debt consolidation" company that promises to cut your debt in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator's fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors have the right to refuse these terms and take you to court.
If you have already defaulted on your cards or they're past due, then you can negotiate directly with your creditors. See Suze Orman's advise:
http://www.youtube.com/watch?v=jS43XFa3KGU
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Plan B is entering a Debt Management Plan (DMP) with a non-profit credit counselor like CCCS (Consumer Credit Counseling Services). Contact your local Red Cross for a referral. They can negotiate lower payments and interest rates. They do not negotiate settlements.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don't use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you're enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt.
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Plan C is filing for Chapter 7 bankruptcy. Keep all options open and do what is best for you.
Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. There is a better way.
A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another.
Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.
2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.
3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:
To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment
Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment
Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.
4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.
5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
You can do it and it isn't as hard as you think. Just follow the plan.