credit card Archives - National Debt Relief

Should You Have A Debit Card And Not A Credit Card?

June 5, 2013 by Samantha Seiffert

Did you know that fewer and fewer people are paying cash when they make purchases? A recent study found that instead of paying cash for purchases, more and more consumers are turning to debit cards.

Just 8%

This survey also found that only 8% of the people queried feel that cash will be the payment method of choice by the year 2020, which is down from 14% last year. Plus, 3.4% of consumers turned away from the use of credit cards, which fell by 3.2%.

Why debit cards?

Debit cards have several advantages over paying cash and even over the use of credit cards. Having a debit card eliminates the need to carry a big wad of cash that could be lost or stolen. Using a debit card at check out is much simpler and faster than writing a check. However, like a check, you can often get cash back as well. I routinely get $40 cash back when I go through checkout at my favorite supermarket, which eliminates the need to go to my bank’s ATM or to pay a $2 or $3 fee to use an ATM that’s out of network.

Better control of your finances

The advantage that a debit card has over a credit card is that it makes it easier for you to keep control of your finances. It’s extremely easy to run up a mountain of credit card debt almost without knowing it. You can’t create debt when using a debit card. Since it pulls money directly from your checking account, it’s impossible to spend more than you have in your account – at least without having an overdraft, which could be very expensive.

Accepted everywhere

Debit cards are generally accepted anywhere that accepts Visa or MasterCard. This can be especially helpful if you’re traveling and try to write an out-of-state check.

The downside of debit cards

Unfortunately, debit cards also have their downsides. The fact that you can’t spend more then you have in your checking account can be both good and bad. It can stop you from running up debt but also prevent you from taking advantage of a great sale on that gorgeous side-by-side refrigerator when you don’t have enough money in your checking account to cover its cost. In addition, debit cards do not have the same degree of protection as do credit cards. If you find an erroneous charge on a credit card, your liability is generally limited to $50 or less. And when you dispute the charge, it will not appear on your statement until the issue has been resolved. In comparison, if you find an erroneous charge on a debit card, it could be as many as 60 days before you get your money back.

Which would be best?

Both credit cards and debit cards have their pluses and minuses. If you have a problem controlling your spending, you might choose to have a debit card. On the other hand, if you’re the kind of person who could use a credit card wisely, meaning that you would pay off your balance at the end of each month, a credit card could be a good choice. Of course, the best option of all would be to use a credit card for those every day purchases but to have a credit card for those times when you would want to take advantage of a huge sale on a big-ticket item.

Filed Under: Blog Tagged With: credit card, debit card, debit cards

Could You – And Should You – Get A Credit Card Loan ?

May 28, 2013 by Samantha Seiffert

Getting a credit card loan or cash advance against your credit card is just drop-dead easy. There’s no application to fill out and no credit check since you’ve already been approved by your lender – the credit card company.

How a credit car loan works

The way this works is that you get the money at an ATM or by cashing what’s called a “convenience” check. You the pay the money back in installments just as you would a personal loan. There may be a processing fee and your credit card provider may limit or block cash withdrawal on your credit card to the extent of your loan.

The pros of a credit card loan

The biggest plus of a credit card loan or cash advance is that you get the money immediately and with no credit check. You simply go to an ATM or write a check and the money is yours. It can serve as a kind of short-term loan to cover expenses that couldn’t be covered with the credit card. For example, a father might use the money to help one of his children who didn’t have his or he own credit card/ Or you could use the advance to pay for an auto repair at a garage that was “cash only,”

The pitfalls of a credit card loan

The biggest negative to one of these cash advances is the interest you’ll be charged. It’s almost certain to be much higher than the interest rate you would pay on a personal loan or even on purchases made with the same card. I saw one study that interest rates on cash advances typically are 1% to 7% higher than the credit card’s standard rate on purchases.
This means that if your interest rate on the credit card was 12%, you might have to pay as much as 19% on that loan or cash advance. Plus, there could be fees attached to the advance that would cause it to cost even more.

You might not qualify

Another negative to a cash advance is that you might not qualify for one. The credit card companies tend to be very wary about “high risk” customers so whether you could or couldn’t get an advance will depend on your credit worthiness.

What to consider

If you feel you need a loan or cash advance against your credit card, there are some things to first consider. First, could you pay back the money in just a few months? Second, is there some other way you could deal with the financial problem you’re facing? Third, do you really need whatever it is you would buy with the money?

Think twice

In other words, it’s best to think twice before taking out one of these loans. Is there some other way you could get the money you need by selling something? Do you have a line of credit attached to your checking account you could tap into that would have a better interest rate? Could you get a cash advance where you work? Could you borrow from your retirement fund or a relative? Any of these alternatives would likely be better and cheaper than a cash advance.

If you’re having a problem with credit card debt
If you’re in a bind because of the debts you’ve racked up on other credit cards, there may be a better solution than “borrowing” money from one credit card to pay off another. As an example of this, Wells Fargo has a program where you could consolidate your credit card debts into a personal loan that would have a fixed interest rate for a fixed period of time.

Filed Under: Credit Card Debt Tagged With: card loan, cash advance, credit card, credit card debt, credit card loan, personal loan

How To Better Manage Your Credit Cards

May 22, 2013 by Samantha Seiffert

If you have multiple credit cards or credit cards along with student debt or a personal loan, managing your due dates can become a real headache. Even worse, you may find that you’re unable to manage your credit card bills and repay what you owe due to your spending habits and a lack of knowledge of the “mechanics” of your credit cards.

Understand the basics

The first thing you need to do to take control of your credit cards is to learn the meaning of the basic terms of minimum amount due, billing cycle and grace period. Taking these in order, the minimum amount due is the amount you must pay that month. You can always pay more but you can’t pay less.

Billing cycle is the days between the last statement and the statement you just received. These cycles are generally from 20 to 32 days.

Grace period is the number of days you have to pay your balance without having to pay a finance charge. This is usually 25 to 30 days.

It’s also important to understand the meaning of APR (annual percentage rate). It is the yearly percentage rate of the finance charge. It will be either a fixed or variable rate.

Stop erratic spending

The second thing you need to do to better manage your credit cards is to stop any erratic or impulse spending. It’s so easy to spend money these days what with all the shopping malls and online shopping marts that have been so cleverly designed to part you from your money. They make it so easy to go on a spending spree and completely lose control of your credit cards. Stop and think about your spending habits. If they’re a bit on the sloppy side and you do want to manage your credit card debt, you have to stop those bad shopping habits.

Pay within your billing cycle

The third step in taking control of your credit cards is to make sure that you pay within your billing cycle (as defined above) and that you pay the outstanding amount due.

Of course, this is much easier said than done. However, many credit card holders do use this effectively by timing their purchases and repayments within the billing cycle. Here’s an example of how this might work.

Let’s say you have credit cards with a due date of the 10th of the month. You could use the card to make a purchase on the 11th or 12th of the month, knowing that it will not show up on your credit card statement until the 10th of the next month, which would effectively give you at least 45 days (your billing cycle plus some grace period) to save enough money to pay it off. And you must pay off that balance before putting another charge against the card or you run the risk of carrying a balance forward, which would mean paying interest and accumulating debt.

If your credit card debt has spun out of control

If you’re so far into debt that it’s making you crazy with worry, the worst thing you can do is to do nothing. There are consumer credit counseling agencies available that could help you deal with the mess. There may be one in your area and if not, it’s easy to find one on the Internet. Just make sure that it’s a nonprofit and that it either offers its services free or at a very low-cost.

Alternately, if you have decent credit you might be able to get a debt consolidation loan and pay off all those credit card debts. You might also elect to hire a debt settlement company to help you reduce and consolidate your debts. Thousands of American families have found it to be the best way to cope with debt that’s gotten totally out of control and you might, too.

Filed Under: Credit Card Debt Tagged With: billing cycle, credit card, credit card debt, credit cards, debt relief

“Should I Get A Loan Or A Credit Card?”

February 13, 2013 by Samantha Seiffert

I saw this question posed on a website by a young woman. She and her partner had mishandled their credit. They had several overdrafts and he had an old loan he had totally forgotten about. She wanted to pay off the overdrafts as well as the old loan and was wondering whether the best option would be to get a new loan or a credit card to pay then off.

Neither of the above

Most financial experts would say that they shouldn’t get either a new loan or a credit card to pay off their debts. The old saying, “you can’t borrow your way out of debt” is absolutely true. If this couple were to take out a new loan or a credit card, they would simply be moving their debt from one set of creditors to a new one.

A better alternative

It’s fairly clear that these young people are not great money managers. This means a better option for them would be to go to a consumer credit counseling agency for help.

How this would help

The agency would review all of their finances, including all their debts and combined income. It would contact all of their creditors and attempt to negotiate reductions in their interest rates. Following this, the agency would help them develop a debt management plan (DMP) for paying off their debts and then submit the plan to their creditors. If all of them accept the plan, they would then be required to send the agency just one payment a month. And this payment should be much less than the total of the monthly payments they’ve been struggling to make.

The downsides of a DMP

There are a few negatives to consumer credit counseling. For example, once this couple signs off on a DMP, they will be required to give up all of their credit cards. Moreover, the two of them will have to be very careful and not take on any new revolving credit until they’ve completed their payment plan, which could take anywhere from three to five years. They will have to be very scrupulous about making their payments every month or their plan could be terminated, leaving them in even worse trouble.

The effect on their credit scores

Enrolling in a debt management plan will have no effect on the couple’s credit scores. When people enroll in a debt management plan, a comment is usually added to their credit reports that they are paying through a credit-counseling agency but this won’t affect their credit scores. In fact, the company that calculates credit scores (FICO) says that since 1999, it has ignored any information about credit counseling when it computes a person’s credit score.

If you choose a debt management plan

If you’re struggling with debt and get a DMP, it can be painful in the short term because it will require self-discipline and probably more than a few sacrifices. However, once you get your debts paid off, you should have a better, less stressful life and a dramatically better credit score.

Filed Under: Blog Tagged With: credit card, debt management plan, debt relief

“Will Opening More Credit Cards Improve My Credit Score?”

January 29, 2013 by Samantha Seiffert

There was just the story of a 25-year-old woman who had a credit score of 735. She had paid cash for every expensive item she had ever purchased, including her car. Her only credit history was a $600 secured credit card that she had opened 10 months ago and she had always paid her balances on time. She has utility bills, which she always pays on time. Her question was “would opening more credit cards improve my credit score?”

The impact of credit cards on your credit score

One financial expert I read pointed out that your credit card mix is only 10% of your credit score. But how you use your credit cards plays the biggest part in your credit score.

Adding more credit card won’t help

This means the short answer to the question “will opening more credit cards improve my credit score” is no. The best thing that this woman can do to improve her credit score is wait until the company that provided her secured credit card sends her an unsecured card (probably after she’s had the unsecured card for a year) and then use it sensibly. This means she will need to continue to make all her payments on time and not carry any balances forward.

The components of your credit score

As I wrote in a previous paragraph, your credit mix accounts for only 10% of your credit score. Your credit history accounts for 35% of your score and the amounts you owe accounts for 30%. The length of your credit history accounts for 15% and what’s called “new credit” is 10%. However, what’s really meant by “new credit” is how many times you’ve applied for new credit. This does not include what’s called involuntary credit score requests, which are those made by companies seeking to grant you credit such as pre-approved credit cards.

Do you know your credit score

If you don’t know your credit score, you need to get busy and find out what it is. Why is this? It’s because your credit score is what rules your financial life. If you have a good credit score of 750 or higher, you can get just about anything you want in the way of credit including credit cards that offer those luscious rewards. On the other hand, if you have a credit score of 600 or less, you may find it hard to get any new credit – unless you’re willing to pay very high interest rates. For that matter, a low credit score can even increase the cost of your auto insurance.

Where to get your credit score

If you go to the website www.myfico.com and sign up for a free trial of its Score Watch program, you can get your credit score free. Most financial experts say that your FICO score is your most important credit score because all three credit-reporting bureaus base their credit scores on it. Alternately, you could go to the site www.creditkarma.com and get your credit score free although it may not be identical to your FICO score. This is due to the fact that this score is based on a formula developed by the three credit reporting bureaus and won’t be the same as your FICO score. However, it will be close enough to it for you to know where you stand credit wise.

Filed Under: Blog Tagged With: credit card, credit management, credit score

8 Proven Ways To Tame Big Debt

November 15, 2012 by Paul Ritz

Do you feel as if you were dead meat being circled by those vultures called debt collectors? Or maybe they’re just credit card companies harassing you. In either event, being seriously in debt is no fun. It can actually tear couples apart, keep you from buying a house, increase the cost of your auto and homeowner’s insurance and maybe even get your wages garnished.

The good news is that there are ways to get out from under that debt – ranging from the easy to be painful. Here are eight of them.

”Snowball” your credit card debts

Do you have several credit cards? If so, you might “snowball” them. All you need to do is make a list of your cards with their balances and interest rates. Begin by paying off the card that has the highest interest rate but keep making the minimum monthly payments on the other cards. As soon as finish paying off that card, you can use the money you freed up and begin paying off the card with the second highest interest rate and so on.

Get a signature loan

If you owe less than $10,000 you could get a signature or unsecured loan and use this money to pay off your credit card debts. However, if you owe more than the $10,000, this might not be feasible.

Try a consumer credit counseling agency

You could go to a credit counseling agency where you’ll be assigned a counselor. He or she will help you develop a debt management plan (payment plan). Your counselor will also negotiate with your creditors to get your plan approved and your interest rates reduced. You will then no longer have to pay your creditors. Instead, you’ll send just one check a month to the credit counseling agency, which will most likely be less than the sum of your current payments.

Increase your payments

Check out your credit card statements. Look for what you’re being charged for interest versus the minimum monthly payment required. The odds are that minimum payment covers just the interest and does nothing to lessen your balance. If you find this is the case, you need to start making more than the minimum monthly payments. If not, you could actually be in debt forever.

Negotiate with your credit card providers

If you have been unable to make payments on your credit cards for more than six months, you may be able to negotiate with your credit card companies to settle your debts. You will need to call each of them and offer to settle your debt for 40% or 50% of what you owe. If you can convince them to either accept your offer or you will file for bankruptcy, many of them will accept your offer. Spoiler alert – you will have to have the cash in hand to make the settlements.

Deal with your non-revolving debt first

Pay off your automobile loans and other non-revolving debt first. If possible, double up on the payments to get rid of those loans as fast as possible and then use the money you’ve freed up to start paying off your credit card debts.

Declare bankruptcy

Declaring bankruptcy is the painful solution. This is because it will stay in your credit record for 10 years. A chapter 7 bankruptcy will dismiss much of your unsecured debts, such as credit card debts, but not all of them. For example, it will not get rid of student loan debts, child support or alimony.

Let us settle your debts

We have helped thousands of American families achieve debt relief through debt settlement. It’s a better solution then do-it-yourself debt settlement for most people as our debt counselors have excellent working relationships with the credit card companies and are very skilled negotiators. Call our toll-free number today and let us explain how we could probably save you thousands of dollars. It’s just a very smart thing to do.

Filed Under: Credit Card Debt Tagged With: credit card, credit card debt, Credit Card Debt Relief

The Best Credit Cards

October 15, 2012 by Paul Ritz

Credit cards can be a very helpful tool if used wisely. They are a convenient way to pay for things without having to carry cash or write checks. You can use a credit card to buy an expensive item and then pay for it over several months instead of having to pay for it all once. For that matter, you can use a credit card basically free so long as you pay off your balance each month. In other words, you get to buy something and use it for several weeks – completely interest-free.

Where people get in trouble

Unfortunately, credit cards can also be a path to problems. People generally get into trouble with credit cards either because of unforeseen circumstances or because they simply didn’t handle them responsibly. As an example of this, I recently read a story of a couple who ran up $90,000 in credit card debt and who had an income of just $2000 a month. This means the minimum monthly payments required by their cards actually exceeded their monthly income.

What are the “best” credit cards?

There is almost a bewildering array of credit cards to choose from these days. However, there are “best ” credit cards depending on some different factors. There are credit cards with the best interest rates, the best credit cards if you have bad credit, credit cards for low interest balance transfers, credit cards that offer the best rewards and then there is one that I call the “Best of Show.”

Credit cards with the best interest rates

If your goal is to pay the least amount of interest, there are several cards that would be right up your alley. Included in this group is the Citi® Diamond Preferred® Card and the Discover® Open Road Card. Other good choices for low interest rates include the Citi Simplicity® Card, and the Discover More® Card. As an example of these cards, the Citi® Diamond Preferred® Card has an APR of just 11.99% to 21.99% depending on your credit worthiness and that’s after 18 months of a 0% intro APR on balance transfers and purchases.

Best credit cards for people with bad credit

Despite what you might think, if you have bad credit you can still get a credit card. In fact, there are several “best” ones available including the Horizon Gold Credit Card, the Applied Bank® Visa® Business Card (that has a monthly fee) and the First Premier® Bank Classic Credit Card, which requires an upfront fee.

Best credit cards that offer low interest balance transfers

A good strategy for dealing with credit card debts is to transfer them to one that has a lower interest rate and a 0% interest rate for some introductory period. As of this writing, the best credit cards in this category included the Citi Simplicity® Card, Slate from Chase, and the Discover More Card. The Simplicity card offers up to 18 months of 0% interest, while the More Card offers only six months interest free.

Best credit cards for rewards

If you want to get rewards for your credit card spending, the Citi Dividend World MasterCard could be a good choice as would be the Citi Thank You Card. This card is especially valuable in that it gives you one point for every dollar you spend and you can use themaz to buy virtually anything.

Best of Show

There is one card that as of this writing I would call the best of the best. It is the Capital One® Venturesm Rewards Credit Card. In fact, Money® magazine recently named it the “best card for rewards for free airline flights.” This is probably due to the fact that you earn 2x miles on everything you purchase and you can redeem them for any expense having to do with travel. If you are a new customer, you get a 0% annual fee for the first 12 months and earn 10,000 bonus miles. However, this card also makes it clear that it is only for people with excellent credit.

Filed Under: Blog Tagged With: average credit card debt, credit card, The Best Credit Cards

What To Do When Your Credit Card Interest Rate Goes From 7% To 19% And You Can No Longer Afford The Monthly Payment

October 1, 2012 by editor

The past few years have been tough for many lenders. In fact, many weaker banks, investment firms and credit card companies have gone belly-up since the financial crisis of the late 2000s.

Those that remain are looking for any excuse to pad their bottom lines. Unfortunately, that often means that they’ll raise their clients’ rates at the slightest provocation. Whether your rate shot up because you missed a payment, exceeded your spending limit, or suffered an unrelated setback to your credit score, you may be stuck paying higher interest rates for years to come.

If your interest rate increased because of a sudden decline in your credit rating, you won’t be able to repair the damage overnight. However, there are a few steps that you can take to offset your poor credit score.

First, avoid missing any more payments. This is easier said than done: When you’re spending nearly all of your after-tax income on household necessities or debt payments, you’re bound to face some tough choices at some point. However, it’s absolutely essential. When they calculate your credit score, all three major credit reporting agencies give tremendous weight to your ability to make your payments on time.

Next, begin de-leveraging. In the long run, carrying excessive credit balances may hurt your credit score even more than missing an occasional payment. If a sudden drop in income or life-changing event does force you to use more credit, don’t charge all of your new expenses on the same card. Spiking balances are a major red flag for credit reporting agencies. Instead, apply for an entirely new line of credit. At the same time, start devoting more of your disposable income to paying down your existing balances.

Even as you take these prudent steps to improve your credit score, you’ll need to begin reducing the size of your debts. If you’re like most borrowers, you simply can’t afford to pay 19 percent interest on credit card balances of any size.

First, stop using the offending credit card and switch to cash or debit. If you must continue to charge certain purchases, use a less-expensive card. Don’t make any new credit requests unless they’re absolutely necessary.

Next, do everything that you can to pay down your balance in short order. To avoid delinquency, you must continue to make the minimum payments on your other cards. The rest of your income after accounting for taxes and household necessities should go towards taking care of your problem card. Depending on the size of your balance and the card issuer’s willingness to refrain from further rate increases, you may begin making headway in short order.

Unfortunately, you may not be able to climb this debt mountain on your own. If you feel like you’ve tried everything and still find yourself paying an exorbitant interest rate on a balance that won’t seem to shrink, don’t panic. Debt settlement may be the answer to your problems.

Debt settlement is relatively affordable and highly effective. Unlike bankruptcy, which may affect everything from your credit score to your job prospects for a decade or more, debt settlement enables you to begin rebuilding your credit as soon as you’ve wrapped up the process.

Unlike some other debt relief options, it’s also brutally effective at reducing the actual amount that you owe your creditors. With debt settlement, you’ll be able to say goodbye to your 19 percent interest rate as well as a significant portion of your card’s outstanding balance.

Call or fill out the no-obligation form today to learn more about debt settlement and start looking forward to a debt-free future.

Filed Under: Credit Card Debt Tagged With: credit card, interest rate, monthly payment

How To Get Credit Card Debt Reduction

May 19, 2012 by editor

You might think you have your finances under control, but unexpected setbacks and stresses can quickly make a manageable load of credit unbearable. Job loss, forced relocation, unforeseen medical expenses and other financial stressors can necessitate your taking on a big load of debt in short order, throwing your careful plans into disarray.

If you’re at a point where you’re barely making the minimum payments on your outstanding balances and new charges continue to appear seemingly out of nowhere each statement period, learning how to get credit card debt reduction is the single most important action you can take with regard to your finances.

Getting out of debt is a fair bit more difficult than getting into it. Once you’ve dug yourself a debt hole and hopped in, climbing out will take some effort. Keeping a few simple tips in mind can simplify and expedite the process, getting you back on track to financial freedom faster than you ever thought possible.

First, stop using your credit cards to make new purchases. Switch to cash or debit for daily expenses and consider setting up automatic payments for your monthly bills. With monthly automatic debits that you can set up and forget about, you’ll be less likely to miss a payment and fall even further behind on your bills, incurring late fees and interest charges along the way.

Once you switch to cash and debit only, you’ll be able to devote larger amounts of your monthly income to paying down your debt. When you run large outstanding balances on your credit cards, a great deal of your minimum monthly payment is devoted to interest payments. If your total credit balance is $20,000 at an average annual interest rate of 25 percent, which is possible if you’ve missed a payment or two and found yourself subject to penalty interest, you’ll owe $5,000 in interest alone over the course of the year.

That’s $5,000 you’ll never get back. It’s more than that, actually. It’s $5,000 that you could be using to pay down your outstanding balances or purchase necessities like food, school supplies or winter clothing.

Once you’ve stopped making new credit card purchases, the next step toward getting credit card debt reduction is organizing your card balances by their rates of interest. Determine by exactly how much you can afford to exceed your minimum payment each month and devote that full amount to the highest-rate balance. Once you’ve paid it off completely, move on to the balance with the next-highest rate of interest and repeat the exercise.

This strategy pays off because it reduces your exposure to high interest rates. If you pay off a $10,000 credit card balance with a 20 percent annual interest rate by $2,500 per year, you’ll be debt free in four years. You also will have paid $5,000 in interest over the life of your loan. In other words, you’ll have spent another 50 percent on top of your initial balance, or a total of $15,000, for the privilege of letting your balance languish for several years.

Now imagine you had devoted the full range of your financial firepower to paying off this one balance. Paying the entire $10,000 balance off in one year would cost you just $12,000, leaving an extra $3,000 and three extra worry-free years on the table. Aggressively paying down your debts requires short-term sacrifice, but it clearly pays off in the long run.

Where To Turn To Reduce Your Credit Card Debts

Once you’ve determined how best to get credit card debt reduction and begun seriously attacking your debt problems, you’ll want to contact a debt negotiation company for help with the final stages of the process. These experts can help folks struggling with credit card debt find solutions to their debt issues that don’t jeopardize their financial well-being.

Some so-called debt relief companies peddle expensive debt consolidation loans whose interest rates can vary considerably and may balloon without notice after a low-rate introductory period. These loans may allow you to pay off your existing credit card balances quickly, but you’ll be left saddled with the same amount of debt in the end.

Debt negotiation is usually a safer, more effective choice, typically taking less time to see through than debt relief loans or bankruptcy. The process is simple, involving amicable negotiations between your debt representative and your credit card issuers. Once your agent has reached a settlement with each creditor, often 50 percent or less of your original balance, they’ll bundle each balance into a single monthly payment, which you’ll hand over to them to be distributed amongst your creditors.

Discover the benefits of debt negotiation. Call today or fill out the form to learn how to get a credit card debt reduction done right!

Filed Under: Credit Card Debt Tagged With: credit card, debt negotiation, debt reduction

Credit Card Debt Consolidation With Bad Credit

May 2, 2012 by editor

You’d love to pay off your debts but you have bad credit. This may not even be your fault. You may have lost your job and have had to use credit cards or borrow money just to get by. Or someone in your family may have had an emergency medical condition that resulted in high medical bills being unable to pay off.

Almost everyone has a problem with debts at one time or another. It has been reported that American families are not carrying $19,000 plus in debt and you can guess that many of them now are also struggling to achieve credit card debt consolidation with bad credit.

There is no miracle cure

Have you seen ads for credit repair companies that promise to get your credit fixed–100% guaranteed? Or that claimed they could get bad credit reports erased?

Don’t believe them. In fact, they are probably scams. The fact is, nobody can remove negative information from your credit report that is accurate. If you find there is information in your file you believe is not true, you can ask for it to be investigated. You will not be charged for this but if it turns out the information is accurate, it will stay in your file. If you have filed for bankruptcy, this will stay in your file for 10 years, as will any accurate negative information.

There are three credit reporting bureaus: Experian, Trans Union and Equifax. All three keep track of your credit history by accessing information from those companies with which you do business–banks, credit unions, credit card providers and any others that provide you with credit. Once a bankruptcy, judgment, lien or bad loan goes on your credit history there is nothing that can be done to erase it – unless you can prove it was false – which may not be easy.

Your alternatives

If you do have bad credit, one good alternative is to go to your local consumer credit counseling agency. One of their counselors will analyze your finances and develop an affordable repayment plan. She or he will contact your creditors to convince them to accept the plan and usually at lower interest rates. Assuming that all your creditors agree to the plan, you will then send a payment monthly to the consumer credit counseling agency and it will pay your creditors.

Debt settlement

If you choose debt settlement, the company or law firm you select will negotiate with your creditors for a lower payoff amount and reduced interest rates. This usually means you’ll have to find the money to settle your debts, which the company or law firm will then put in trust until all your credit card debts have been paid off. Of course, the big issue here is where do you get money to settle those debts?

Bankruptcy

Of course, the ultimate way to get credit card debt consolidation is by filing for bankruptcy. If you have assets you want to keep, you can elect to file a Chapter 13 bankruptcy. This gives you the opportunity to reorganize your debts and pay them off in anywhere from 3 to 5 years. A Chapter 13 bankruptcy is often called the “wage earners” plan because it allows you to keep your properties and your income stream. However, the type of bankruptcy chosen by many American families is a Chapter 7 that allows you to discharge your credit card debt and other unsecured debt. However, you could see some of your assets seized.

Debt relief

Even if you have bad credit, you may be able to achieve credit card debt consolidation through a technique called debt relief. This is where you hire a company to negotiate debt settlements with your creditors where you get as long as 24 to 48 months to pay off your debts. A skilled and experienced debt relief company such as National Debt Relief should be able to negotiate a settlement that would reduce your debt by 50% to 60% and your interest rates as well.

Filed Under: Debt Consolidation Tagged With: consolidation, credit card, credit consolidation, Debt consolidation, medical bills