Getting out of Debt with Help

I have debt, don’t we all? I assume there are some of my readers out there who have amazing credit and have always done well with budgeting, I am not one of those. I wish I was. I am beginning to be, however, I was not always. When I turned 18 years old credit card companies mailed me credit cards directly in the mail. Just call to activate they said. Literally the cards were ready to be activated in my name, without me ever calling nor applying for them. That doesn’t happen these days it seems, but it did happen to me back then at least 3 times, if not 4 times. Interesting, huh?

money

Well most people would probably cut that card right up and toss it, I felt the need to max it out on clothing as one was for a clothing store and junk such as snacks and gas for the car. I was 18, a high school graduate and totally not thinking clearly, obviously. A few years later I still had not paid off those credit cards, they lingered making my credit not so great for a while until I finally found out about Debt Consolidation Options. There are so many ways to work out debt and get it paid off, thus creating a better credit standing on your credit report.

I chose to go with debt consolidation and paid off all three or four credit cards within just a few years after having them maxed out and being put on my credit report as delinquent.  I did the debt consolidation process with a company that actually spoke to each credit card company on my behalf and worked out a deal to help alleviate this debt while helping it be reported to my credit report as being paid on as agreed or something like that.

If you find yourself in debt for any reasons, I would highly recommend doing what I did way back when; research your options and work with debt consolidation specialists that can help work with you through this process without you getting into any agreements to pay off debt that you may not understand.

Why Consolidating Debt to Chuck the Ball of Personal Credit Card Debt Completely


Introduction

According to a recent survey by Bankrate, credit card debt in America equals the amount that most people have in emergency savings. Numerically this means only 55% of people have savings that exceed their credit card debt. According to the same survey, consumer credit has been falling in recent times, but still there are no positive trends when it comes to saving habits.

 

With the rise in credit card debt, more people are looking for ways to solve their financial problems. Debt relief can be achieved through several means, but in this article, you will learn why debt consolidation is the best way to remove your personal credit card liability. You will also learn how to apply for a consolidation program.

What is Debt Consolidation?

Debt consolidation is a practical way to eliminate your debt by combining all your liabilities and their sky rocketing interest rates into one debt with a low interest rate. Hence, you will only have to take out one consolidation loan to amortize your existing liabilities. In the end, you will have just one loan with a lower interest to service, and this speeds up your debt recovery.

 

Consolidation is the best option for people who are currently paying high interest rates. Moreover, most people are not money wise and they are unaware of the nuances of financial management, while others are hooked on their cards so much that paying bills on time now has become a big problem.

 

In addition, there are some people who incur a lot of credit card debt during their graduation. Young mothers especially attend grad school and only work part time to concentrate on their studies and raise their families. But by the time they get their degree, credit card debt piles up. Debt consolidation therefore is an effective solution in such situations.

 

An Example:

 

Here is statistical example from Investopedia that explains how debt consolidation works:

Suppose at this time you are using 3 cards with a yearly interest charge of 28%. The limit on each card is $ 5,000, and you are making monthly payments of $250 at present to repay them. If you were to tackle one card at a time, that would amount to monthly payments of $750 for more about 2½ years. By the end of the whole thing, you would have paid approximately $5,400 in interest.

 

However, by converting them into a single consolidated loan at a lower interest rate of, let’s say, 12%, you would continue with the same monthly payments. But this time, you will clear the debt in 23 months, and pay only $1,820 in interest. This means that by using a debt consolidation loan, you will make savings of $7371 (with $3621 in interest) than if you were to clear your debt in another way.

When Should You Consolidate?

Before proceeding, it is important to note here that debt consolidation will generate the above mentioned result only if you cease using the 3 credit cards. That is why it is important to make an assessment of your spending habits before determining whether debt consolidation is a viable option for you.

 

Here is a list of spending habits to watch out for:

  • Using credit cards to pay for bills and utilities
  • Using credit cards to buy things that exceed your income
  • Writing checks for amounts that exceed your balance and then hoping to cover them by making a deposit
  • Opening new credit card accounts because existing ones have maxed out
  • Being called by a collection agency

If these factors apply to you, debt consolidation will not work unless you change your attitude towards money management, budgeting, and saving.

How to Apply

Select a bank for the loan and consult with its financial adviser  If you are an old client of this bank, you can get the loan at favorable rates. You will also have to submit documents to the lender like your letter of employment and letters from creditors or settlement agencies.

 

Finally, you can even line you your credit card debt with a secured debt like your mortgage. In this case, the bank will be willing to charge less interest because if even if you default, the bank can cease your secure assets and auction them to recover their loss.

Conclusion

Even though debt consolidation is the best way to eliminate your credit card debt, remember that it is your overall spending habits that will ultimately help you get out of your financial troubles. Credit counseling is available through several means, and you can even search the internet for the best programs available.

About the author

This article is composed by Elaine McPartland who is associated with “Consolidated Credit” as their community writer. She feels that to get rid of credit card debt you should consolidate debt immediately. You can add her at her google+ profile.

How I Used Debt Consolidation Services to Free Myself of Credit Card Debt

It was the summer of 2000… I had graduated high school, and was excited to continue on working in a fabulous office for who knows how long. My resume had been built up, money was great, and then it happened… Credit cards starting arriving in the mail! I must have received a total of five credit cards without even applying for them. Visa, MasterCard, Fashion Bug, you name it! The card would arrive, and instead of cutting it up, as I would do these days, I used them all. At age 18 I maxed out five credit cards and after losing my office job for other reasons, I was in a position where I needed to get out of credit card debt.

I sat on that credit card debt for about three years while it destroyed my credit rating and made it near impossible for me to have a normal, good, credit adult life. Finally, after getting a decent tax refund one year, I decided to look into debt help companies. After reviewing contract after contract, and trying to determine if utilizing a debt consolidation service was appropriate for my financial freedom, I finally was able to locate a company that I thought worked well for my situation.

My decision to work with a debt consolidation company was determined through detailed reviews of how the contracts worked, which company had a great rate to work with, and if my total debt was considerable enough to work with a debt consolidation company. I wanted to be able to pay off bills faster than I would have been able to living paycheck to paycheck.  The end result when using the debt consolidation company was that I paid off my credit card debt at a financial rate that worked for my specific needs at that time in my life. The contract I had was open enough so that I was able to cancel the contract, should my need for the service no longer be valid. However, I stuck by the contract, and paid off all of my credit card debt within just a few short years.

Merging my credit card debt into one consolidation plan really helped me to move forward in my adult life in a positive financial way.

 

There is Debt Relief Help

If one thing in this world has been getting me stressed out and sick it’s the financial struggles I face now and again. I slowly work at paying off my bills the best I can because that is all we can do. We live each day to survive the best we know how. Today I am sharing with you a solution for those who may be suffering from debt and uncertain of options, http://www.debtconsolidationconnection.com is a site that offers debt consolidation, financial education and debt management.

There are even services such as debt calculators and a do it yourself loan modification calculator under “tools and calculators” section of the Debt Consolidation Connection website. No matter what financial situation you are in, do not allow yourself to be consumed by the situation, turn your mind into thinking about a solution for the situation at hand. Thinking in such a proactive way is the only thing that keeps me moving forward every day!

Disclosure: This is a sponsored post, personal opinions are that of my own 100%.

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