Credit card debt is a nightmare of a problem and unfortunately there a lot of people who face this today (and if others don't pay heed, they might get trapped into credit card debt too). Credit card debt consolidation is generally regarded as the most important step in credit card debt reduction and elimination.
So what is 'Credit card debt consolidation'?
credit card debt consolidation is the process/strategy to consolidate debt from multiple credit cards into lesser number of credit cards (ideally one or two credit cards). Credit card debt consolidation is sometimes also referred as a balance transfer where you transfer your balance on one credit card to another credit card. Generally, the balance transfer (or credit card debt consolidation) is done from credit cards with higher APR to credit cards with lower APR. Credit card debt consolidation can also be achieved by going for a bank loan (at a lower interest rate) and using that towards paying the debt on the higher APR credit cards. This loan is then paid-back to the bank in the form of monthly instalments.
As you would have noticed, a lot of credit card suppliers and banks keep coming out with attractive offers for Credit card debt consolidation (or balance transfers). There is no dearth of 0% APR offers for credit card debt consolidation. However, credit card debt consolidation is a serious exercise and you must exercise caution so that you don't get into deeper trouble. When going for credit card debt consolidation, you must properly analyze the offers from various banks and credit card suppliers. Check the time period for which 0% APR is being offered and also the APR that would be applicable after the lapse of that period. Generally, 0%APR is valid for a 6-12 month period only. So, if you are confident of paying back a considerable amount of debt in that period, this kind of credit card debt consolidation will work for you even if the APR (post 0% period) is a bit higher. However, if that is not the case, the long term APR is going to be the most important thing for you. If the long term APR is more than the APR for your current credit card, this kind of Credit card debt consolidation will be futile for you. Also, check processing charges etc before you actually go for balance transfer or credit card debt consolidation with another supplier/bank. Another good idea is to check with your current credit card supplier and see if they can offer a lower APR to you in order to help you in clearing off your debt (you would be surprised that they do oblige at times and hence eliminate the need for credit card debt consolidation).
It's important that, with credit card debt consolidation, you also inculcate good spending habits; otherwise credit card debt consolidation would really be of no use to you.
Wednesday, April 1, 2009
Credit Debt Relief - Best Options Available
Many people today never thought they would be in financial difficulty. Then, because of an illness, or a divorce, a loss of job or any number of things, they have ended up in financial difficulty and in need of credit debt relief.
When they were bringing in the weekly pay checks, the large credit card bills and minimum payments did not seem to make any difference. But with a loss or reduction in income it may suddenly become impossible to meet even the the minimum payments and bills continue to grow from interest and late charges.
The worst thing a person can do when faced with a situation like that is to do nothing. Nothing can only make it worse until it gets completely out of control. There are other proactive options that are available for credit debt relief. The one we most hear of and probably the least desirable is bankruptcy.
As an individual, you are eligible for a Chapter 13 and possibly a Chapter 7. Both become a permanent part of your record and will follow you for the rest of your life. Bankruptcy may save you a little of what you owe but the way you pay it back will be out of your hands and in the hands of the courts. Avoid this unless you run out of options.
Another option for credit debt relief, if you are fortunate enough to own or have a large equity in real property, is a debt consolidation loan. In essence you either refinance or take out a second mortgage. The money you gain from this is then used to pay off your out of control debts.
The advantages are that your payments are now lower and your interest is now tax deductible. The disadvantages are that your payments are now spread out over 10 to 25 years and if you fall behind on this loan you can forfeit your property.
Debt settlement is growing in popularity as a viable means of credit debt relief. In this process you work with an experienced debt specialist to determine if you are eligible. You will need to meet a minimum criteria for debt.
If you qualify, you will declare your total debt and your income from all sources. The debt specialist will contact the people you own money to and negotiate a settlement that works for all. In most cases, it results in a substantial savings for you. Your debt specialist becomes your liaison with your creditors and you no longer have to deal with them. As long as you keep up your repayment program you are off the hook. Louis Zhang, Icreditdebtrelief dot com
Directory Submission service:Our professionals submit your website in popular and relevant directories.By submitting your website in directories you can get lots of visitors and better one way links.
When they were bringing in the weekly pay checks, the large credit card bills and minimum payments did not seem to make any difference. But with a loss or reduction in income it may suddenly become impossible to meet even the the minimum payments and bills continue to grow from interest and late charges.
The worst thing a person can do when faced with a situation like that is to do nothing. Nothing can only make it worse until it gets completely out of control. There are other proactive options that are available for credit debt relief. The one we most hear of and probably the least desirable is bankruptcy.
As an individual, you are eligible for a Chapter 13 and possibly a Chapter 7. Both become a permanent part of your record and will follow you for the rest of your life. Bankruptcy may save you a little of what you owe but the way you pay it back will be out of your hands and in the hands of the courts. Avoid this unless you run out of options.
Another option for credit debt relief, if you are fortunate enough to own or have a large equity in real property, is a debt consolidation loan. In essence you either refinance or take out a second mortgage. The money you gain from this is then used to pay off your out of control debts.
The advantages are that your payments are now lower and your interest is now tax deductible. The disadvantages are that your payments are now spread out over 10 to 25 years and if you fall behind on this loan you can forfeit your property.
Debt settlement is growing in popularity as a viable means of credit debt relief. In this process you work with an experienced debt specialist to determine if you are eligible. You will need to meet a minimum criteria for debt.
If you qualify, you will declare your total debt and your income from all sources. The debt specialist will contact the people you own money to and negotiate a settlement that works for all. In most cases, it results in a substantial savings for you. Your debt specialist becomes your liaison with your creditors and you no longer have to deal with them. As long as you keep up your repayment program you are off the hook. Louis Zhang, Icreditdebtrelief dot com
Directory Submission service:Our professionals submit your website in popular and relevant directories.By submitting your website in directories you can get lots of visitors and better one way links.
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