Posts Tagged ‘get out of credit card debt’

Credit Debt Help Companies - Where to Look

April 3rd, 2010 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips

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Before you go out looking for companies or organizations offering credit debt help, you need to try a number of easy solutions first.  First of all, you have to examine your expenses and find out if there are any items that can be discontinued because they are not necessities.  Actually, this could be the easiest route towards being debt-free because you have absolute control over this even if a little sacrifice may be required.  Another way to solve the financial problem is to ask for a loan from family members.  However, it is important to note this loan from a relative will need appropriate documentation to ensure that he or she will not be required to pay income tax for an implied interest or a gift tax if it is not considered as a loan or no interest is charged.

Another possible solution that you can look into before looking for credit debt help is borrowing from his 401(k) or getting a debt consolidation loan.  You may be able to consolidate your different credit card loans by using a balance transfer card that offers a low interest rate at the start.  However,  make sure that you check the normal interest rate of the balance transfer card after the promotional period has expired to ensure that it is not bigger than the rates of your original credit cards.  A second way to consolidate your high-interest loans is to obtain a home equity loan if you already have sufficient equity.  

If you still think that you will require credit debt help after attempting the above recommendations, it is time to search for a credit counseling service.  You may want to start looking for a non-profit organization offering this kind of service.  However, it should not be assumed that they will not collect any fees just because they are listed as non-profit agencies.  You will then need to look at the membership and monthly fees, including their privacy policy to ensure that your confidential information is safe.  It is also advisable to determine the kind of services that they provide beforehand, such as counseling, budgeting advice or a debt repayment plan.

After enrolling for this kind of credit debt help service, you can then talk with your assigned counselor to find out what you will be paying every month.  The arrangement would be for you to pay to the service provider a certain amount every month that they will be distributed to each of your creditors.  The immediate benefits are that you only need to issue one check to the service provider instead of one check for every creditor and that the irritating phone calls from the creditors may stop. Visit TheDebtAnalyst.com for more details.

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Pay Off Those Small Debts And Increase Your Credit Score

October 28th, 2008 by Adam | No Comments | Filed in Credit Score, Credit Score Advice, Credit Score Tips, Get out of debt, Pay Your Bills, Personal Finance

Want to know how to increase your credit score?  Pay your bills on time and pay off your debts.  Sounds simple enough right?  Here’s a little more help…

Is too much debt overwhelming you?  If so, here are some suggestions to help you pay off those small debts.

Experts advise it would be better to pay off credit cards with high interest rates first.  However, perhaps in your case, paying off those small debts will give you the incentive to put together a monthly budget and eventually pay off all you owe.

Make a list of the smaller debts you have and try to increase what you repay; that is, take what you can afford to put aside after all the household bills have been paid, and add it to the minimum amount due.  The satisfaction of paying off a small debt will motivate you to move on to the larger debts you may have incurred.

After you have paid off the first bill on your list, start paying off the second debt utilizing the same method.  For example, if you paid $50.00 minimum and added an additional $25.00 for the first debt; pay $75.00 a month for the second debt.  This method is referred to as Debt Snowball and is mainly used to pay off high interest rate credit cards.

However, it also can be used in reverse and has been effective for those who have been steadfast in their desire to pay down all their debts, starting from the smallest to the largest debt.

One of the best ways to determine how much you can put aside from each paycheck is to establish a budget by listing the essentials first, including rent, mortgage, food, utilities, and pension contributions.  How much you have left will determine the amount you can safely put towards the debts.

If the amount is small, don’t worry about it.  The idea is to pay more than the minimum every month.  For example, if you had a debt of $4000 at 18% interest, it would take approximately 291 months to pay it off with a minimum of $100.00 paid each month.  Conversely, if you added $25.00 to that amount, the debt can be paid off in 44 months.  Moreover, while the interest on the former would come to $5,615.32, the latter would only increase to $1,490.22 in interest paid.

You can see from the first example given that on a $4000 debt, the interest can be more than the principal amount owed.

The way to get out from under any kind of debt, large or small, is to make some sacrifices.  Try to reduce the number of times you dine out, take lunch to work, utilize grocery coupons and buy in bulk, purchase store brands instead of name brand items, and buy clothing at consignment shops or thrift shops.  If you work outside the home, try carpooling or take public transportation.

The bottom line is that debt can drag you down and stress you out.  Cut up all credits cards except one, which should only be used in extreme emergencies.  Pay with cash.  If you can’t afford it, you can’t buy it.

The saying cash is king applies here.  Do your best to pay cash for everything including rental cars and travel.  This way you can avoid going deeper into debt.

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How to get rid of credit card debt

June 11th, 2008 by Adam | No Comments | Filed in Credit Repair, Credit Score, Credit Score Advice, Credit Score Tips, FICO Score, Get out of debt, Improve Credit Score, Pay Your Bills, Personal Finance

Looking for a way to get out of credit card debt and increase your credit score?  Check out these tips to help you.

Credit Card Debt Solutions

According to the FTC, there are four basic methods you can utilize with regard to credit card debt solutions: Credit Counseling, Debt Management Programs, Debt Consolidation, or Bankruptcy.  While bankruptcy should only be considered as a last choice, let’s review the former programs that may be of significant help to you if you are in debt.

Credit Counseling:

By selecting a reputable credit counseling service and talking with certified counselors, you may have the opportunity to learn how to budget properly and maintain finances in a more productive manner.  Counselors can offer the tools and resources you need to pay down your debt and become debt free.

Of course, not all counseling agencies are on the up and up.  So it is important to research as many organizations as you can. Call them and make an appointment and be prepared to ask many questions, such as:  What type of service do they offer; do they charge fees for their services; are they licensed to operate on your state; are the counselors certified.

Debt Management Program:

This, too, requires a great deal of research to determine if this is the method right for you.  This program also encompasses certified credit counselors.  In essence, you give them money each month and they pay your bills.  Depending upon your financial circumstances, the time it will take to clear up all debt can be up to four years.  Again, talk to the selected debt management organization before you sign on the dotted line.

Debt Consolidation:

This is the third alternative, but one that may cost you additional money as well as reduce your credit score.  The reason is that if you borrow money to pay off a credit card debt, you still owe the same amount of money but have incurred additional interest and fees.  If you decide to take out a second mortgage to pay debts, there is the risk that the points will increase as well.

Although debt consolidation may be considered a likely alternative, you may want to look into other options before you decide.

Perhaps you can take on a second job or ask a family member for a loan.  In either case, there are no easy solutions to credit card debt.  It will take a great deal of thought, planning and budgeting so that you do not incur any more expenses than need be.

In the interim, you can call credit card companies and ask to have your interest rate lowered, or you can negotiate with them if you are severely in debt to lower your minimum amount due.  You can also consider selling items no longer needed or unused on eBay so that whatever profit you make can be applied to existing debt.

The most important way to resolve getting out of debt is to fully accept that you are in debt.  Once you make the commitment to pay off this debt using any one of the aforementioned solutions, you are well on your way to a debt-free life.

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Credit Card Debt Tips

May 21st, 2008 by Adam | No Comments | Filed in Credit Repair, Credit Score Tips, Get out of debt, Pay Your Bills, Personal Finance

Americans are in credit card debt – some quite deep. Statistics show that the average American carries an average of $10,000 in credit card debt. That’s a lot of money! We are an instantaneous society meaning we want what we want when we want it. So when a consumer has a credit card, it’s often easy to just whip out the piece of plastic and charge purchases.

It’s not that we don’t intend to pay the bill – at least most of the time. Most people have good intentions when it comes to their credit card debt. They’ll pay the bill when they get their next paycheck, they’re expecting a cash windfall and they’ll pay the balance in full then, or they figure they can always make payments. But sometimes life happens and circumstances step in preventing people from paying down their credit card debt which is how many people get into trouble.

Credit card companies like this and they constantly deluge us with offers of low financing rates with high credit limits all in the hopes that they will run up a debt and then have to pay finance charges which is how they make their money. And those credit card offers are coming to people at younger and younger ages.

It’s not uncommon for a new high school graduate to get a credit card offer that they send in for. Many of these young people love the feeling of being able to charge merchandise without having to pay for it at the time. Many of these young people are also not financially savvy and the credit card debt piles up rather quickly.

If you find you have gotten yourself into a problem with credit card debt, it’s important for you to take steps right now to take care of it. That means you need to pay down that debt as quickly as you possibly can until you can achieve a zero balance. Probably the best idea to get out of credit card debt is to cut up the plastic and then make the largest payments you can for as long as you can to help take care of the problem.

Credit card debt is a fact of life for many Americans and it can affect credit ratings which can cause denial of a loan for a car or a home. Get out of credit card debt as soon as you possibly can. It will reflect well on your credit report and make potential future lenders trust you more as a good credit risk.

Click here for help with getting out of credit card debt

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