Credit Repair Articles » Debt Consolidation

How to Pay Off Your Christmas Debt in 2012

bbcred — Mon, 26 Dec 2011 04:14:43 +0000

For many people, Christmas shopping is a must and the holidays will never be complete without spending. But before the year ends, ask yourself, “Will you be stress-free come 2012 or will you find yourself stuck in deep holiday debt that would be difficult to get out of?”In case, you do find yourself stuck in debt, be sure to act quickly and do not delay paying off your Christmas debt. On this post, we present practical tips on how you can become debt free at the soonest time possible.

Check your report. As a consumer, you have the right to request for a free copy of your credit report from each of the three major credit bureaus. You can exercise this right at the start of 2012 especially if you used credit cards to shop. Thus, you can check the status of all your accounts and make sure that the charges are correct.

In case you find errors or incorrect charges in one of your accounts, you can call up the issuer involved to dispute the charges. You can also send a dispute letter to the bureau that issued your report. Upon receiving your letter, the bureau will conduct its own investigation which can take up to 30 days. If your dispute is valid, the corrections will be made and you will receive an updated copy of your credit report for free.

Pay off the balance on your highest rate card in full. If you own multiple credit cards, check which one of your accounts carries the highest interest rate. If you can, pay off your full balance on this account immediately to stop your debts from further accumulating. You can also completely pay down the credit card with the lowest balance.

Consolidate credit card debt. One way to make repayment easier is to transfer balances from a high rate credit card to a card with a low APR. You can also apply for a new credit card that offers 0% balance transfer rate. Thus, you can focus on paying off your original debt without incurring additional interest rate charges.

However, this strategy should be done with caution. For instance, before signing up for a new card with 0% balance transfer APR, you need to make sure that you will have sufficient time to completely pay off all the charges you transferred. You should also check the regular interest rate when the introductory period ends. Some cards with 0% balance transfer rate may impose expensive fees which can prove to be a burden so you need to be smart when acquiring a new credit card.

Minimize your spending. Do you follow a monthly budget plan or spending plan? If yes, you might need to restructure this plan at the beginning of 2012 so you can focus on the most important task at hand- paying off your Christmas debt.

Aside from cutting back on your personal spending, avoid incurring new charges which can make debt repayment difficult. Avoid using your credit card to buy things that are not important or for paying bills if you can pay with cash.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit credit cards.

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Using Debt Consolidation to Get Rid of Debt

bbcred — Sun, 30 Oct 2011 23:12:04 +0000

Many people struggle with bad debt due to different reasons. For some, bad debt is a result of uncontrolled spending and poor management of finances. Others failed to keep up with debt repayment because they have been laid off from work unexpectedly. Different problems can cause debt build up and sometimes, debt consolidation can be the most appropriate solution.

Before consolidating debts, it’s important to understand the steps involved in the process. Debt can be consolidated in different ways and you should carefully consider which option fits your financial situation. Let’s talk about the different methods of debt consolidation.

Debt Consolidation Loan

A debt consolidation loan can be used to pay down all debts at once. This type of loan is secured with the borrower’s property so you should be aware of the risks. The borrower must provide collateral to guarantee repayment of the loan. You can use your home or other valuable property as collateral, depending on the amount borrowed.

Consolidating debts through a loan is a smart strategy to immediately stop debt from accumulating due to the monthly interest rate and late penalty charges. It is also a great way to reduce your monthly loan payments since you only deal with one lender and pay a single interest rate.

As soon as your debt consolidation loan gets approved and all your creditors have been paid, keep in mind that you still have an obligation to your debt consolidation lender. Always remember that failing to keep up with your monthly loan payments could lead to trouble since you could lose your property or collateral to your lender.

Debt Management Program

Aside from loans, debt consolidation companies also offer another form of debt consolidation service. This type of service is known as DMP or Debt Management Program. Upon enrolment to the DMP, the borrower will submit a monthly payment to the debt consolidation company. In turn, the company would be the one to distribute payments to corresponding creditors.

For borrowers who are not qualified to get a loan, signing up for a debt management program can be a smart move especially when the debt problem has become overwhelming. Nevertheless, consumers must make sure that they are dealing with a legitimate consolidation company because some agencies are known to make money out of these programs.

Balance Transfer Credit Card

For consumers who have a problem with credit card debt, there is another way to get out of debt aside from taking out a debt consolidation loan. If you own multiple credit cards with high interest rate, transferring your balance to a new card with a lower interest rate can make repayment less of a burden. In fact, you can find balance transfer credit cards that offer 0% introductory APR which means you can pay down your balance with no additional interest rate charge.

Should you decide to consolidate your credit card debt with a balance transfer card, remember that the zero interest rate is just a temporary offer. Get to know how much the regular rate would be when then introductory period ends. More importantly, complete your payments while the zero rate still applies.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing personal loans for bad credit and credit cards for bad credit.

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Tips on How to Avoid Financial Risks

bbcred — Mon, 20 Jun 2011 05:45:05 +0000

If you are looking for helpful tips that you can use to avoid financial risks this year, then you have certainly stumbled upon an excellent article.

In the succeeding paragraphs, we tackle several tips guaranteed to help people avoid huge financial risks that they might encounter in the coming months of 2011.

Three Tips for Credit Consumers

1. Pay off your credit card debt first. With rising rates of interest finance and charges, consumer experts advise credit cardholders to prioritize paying off their credit card debts. In so doing they can avoid making substantial payments on interest charges as well as on other fees. But how can they do this?

Credit cardholders may apply for debt consolidation loans which can provide them ample funds to pay off their debts in one full-swoop. This way, continuous debt accumulation due to high rates and fees can be prevented.

They can transfer and merge their outstanding balances to a credit card with zero balance transfer interest rate. This way, it will be easier for them to pay down their credit card debts since they won’t have to pay additional interest rate fees. Furthermore, they will only be required to make just one payment each month making repayment a much simpler task.

2. Set-up a contingency fund. Consumers are also reminded of the importance of establishing contingency funds. After all, they will have accounts from which they can withdraw cash that they might need to finance an emergency, such as an immediate medical operation, a sudden loss of job, or an injury that might prevent them from working for several months.

Having a contingency fund can also help consumers maintain an excellent credit score. After all, if a consumer has substantial savings, he won’t need to borrow instant funds, which often impose high rates of interest and fees, in case an unexpected event suddenly arises.

3. Seek professional advice. Consumers who wish to rebuild their bad credit history are encouraged to sign up for credit counseling services. After all, through the help of a certified finance specialist, they can certainly learn how they can manage their personal finances more efficiently.

A session with a credit counselor can also open the eyes of consumers to practical techniques that will enable them to improve their credit scores. And should they practice every strategy and tip that they will learn from a credit counseling program, for sure they will be able to stay on top of their finances all the time.

In fact, consumers who are stuck in an extremely bad debt situation are advised to complete a credit counseling session first before thinking about filing for bankruptcy. The law requires credit counseling to ensure that those who seek bankruptcy really have the right reasons to do so.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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How Debt Consolidation Loans can help Resolve Credit Woes

bbcred — Thu, 16 Jun 2011 01:51:02 +0000

Many people today are wondering why more and more consumers are deciding to take out debt consolidation loans to retire their existing financial obligations. After all, a majority of these individuals are not really familiar with how a debt consolidation program actually works.

So today, we have decided to help our readers understand debt consolidation loans better. This way, we can help them realize how such a program can help them resolve their financial problems.

How Debt Consolidation Works

Debt consolidation is a program which enables consumers to merge or consolidate their outstanding debts into just one account. This way, it will be much easier for them to manage their monthly payments, especially because through consolidation, they will only be required to make a single payment each month.

A debt consolidation program can be offered in through any of the following methods:

Through a debt consolidation loan. In this program, lenders will extend substantial funds to borrowers so that they can completely settle their credit obligations. In return, they have to repay not only the principal amount that they borrowed but also the interest that will be charged on their respective loans.
Through a zero interest credit card. Consumers with huge credit card obligations are encouraged to transfer their existing credit card balances into a zero-interest credit card. This way, they can avoid making substantial payments on interest charges, especially when they handle multiple credit cards with widely varying rates of interest and fees.

Why is it Beneficial to Consumers?

Now let us consider how debt consolidation can help credit consumers.
As was mentioned above, this credit option can help consumers simplify their lives. Instead of worrying about paying multiple credit charges on a monthly basis, they will only be required to make a single payment each month, should they decide to apply for a debt consolidation program.

Some lenders provide debt consolidation loans usually impose fixed rates of interest and flexible payment terms on the loans they extend to their borrowers. If you do your research, you should be able to find a lender that offers a reasonable loan deal.

Another benefit of debt consolidation is that you can reduce your monthly payments significantly because you only need to pay a single rate of interest. Furthermore, repayment becomes less of a burden because payments are stretched within a longer repayment period.

Debt consolidation loans are often secured loans. By pledging an asset or a valuable property against the secured debt consolidation loan they wish to take out, they can increase their chances of being granted the substantial funds they need which can help them pay down their outstanding debts.

Last but not least, consolidating debt gives you the opportunity to rebuild your credit score. As you pay your debt consolidation loan, you can also improve your credit standing one payment at a time.

About the Author

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Frequently Asked Questions about Debt Consolidation

bbcred — Mon, 13 Jun 2011 04:37:54 +0000

Many people today are not very familiar with debt consolidation loan programs. After all, not many articles and journals discuss what this credit account is all about. So today, we to provide useful information about this type of loan program by answering some of the most frequently asked questions about debt consolidation.

FAQ’s about Debt Consolidation Loans

What exactly is debt consolidation?

Debt consolidation is a program that aims to help consumers pay off their existing debts. It involves merging or consolidating debts into an account that consumers can repay through single monthly installments.

A debt consolidation program can be offered through any of the following methods:

A substantial loan that consumers can use to completely retire their existing financial obligations or
A zero interest credit card where in all their credit card debts will be consolidated.

What are the benefits of consolidating debts?

Consolidating debts can surely work to the advantage of consumers. Instead of managing several debts with varying interest rates and fees, they will only need to worry about making a single payment each month, so that they can gradually settle their existing financial obligations.

Consolidation is also an effective way to stop the continuous build-up of debt due to additional monthly charges such as rates and fees.

And because this type of financing involves a longer repayment period, you can find lenders that offer debt consolidation loans impose relatively lower rates of interest and fees.

Can consumers with low credit rating apply for debt consolidation loans?

An unreliable payment history, especially one that contains payment delinquency, bankruptcy, tax liens and other negative records can reduce your chances of being granted a loan for debt consolidation.

Still, it is good to note that a growing number of firms these days cater to the specific needs of consumers with bad credit scores. To compensate for the huge risk involved in allowing consumers with poor credit rating to take out loans, they normally charge higher rates of interest and impose more stringent payment terms.

What is a secured debt consolidation loan?

A secured debt consolidation loan is a credit program that requires borrowers to pledge collateral or security for the loan they wish to apply for. In most cases, consumers secure their debt consolidation loans by offering their homes as guarantee that they will repay on time.

However, it is important to note that this type of credit program has a huge drawback. In case a borrower fails to keep up with monthly payments, a lender can repossess the home to settle all unpaid charges. Thus, consumers are constantly reminded to consider the risks and responsibilities before they apply for a secured debt consolidation loan.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit personal loan and credit cards to people with bad credit.

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Credit Card Debt and You

bbcred — Mon, 16 May 2011 02:15:33 +0000

Each year, many people are helplessly stuck in credit card debt for reasons that could have been avoided. In this article, let’s talk about some things you need to know about credit cards so you can enjoy the advantages they offer while avoiding the trap of bad debt.

Don’t owe more than you can afford. A lot people charge expensive purchases to their credit card thinking that they can pay spread their payments for a couple of months anyway. But such reasoning often leads to bad debt.

Remember, if you choose to pay only the minimum due and carry a balance, you will have to pay the interest rate which can range anywhere from 10% to 20%, depending on the type of card you own.

Plan your repayment. Sometimes, using a credit card to finance a need makes sense but you need to know exactly how you will pay for it and how long you will keep a balance. For example, if your credit card offers zero interest rate for 6 months, you can take advantage of this period to make a large purchase as long as you can complete your payments before the regular rate applies.
Take your obligations seriously. Owning a credit card involves a serious responsibility. If you cannot abide by the terms and conditions of your issuer, you could be penalized with fees and your credit score may suffer. On the other hand, if you are aware of your privileges as well as your limitations as a credit card holder and you treat your obligations seriously, then you should be able to manage your credit card without problems.
Understand how credit card usage affects your credit score. Indeed, the way you handle your credit card or credit cards have a significant effect on your personal credit. Take note that 35% of your FICO score is based on timeliness of payment. Credit limit utilization is another factor used to calculate your credit score. Ideally, cardholders should keep their credit limit usage at 35% or lower to maintain an excellent score.
Don’t ignore the problem. If you think you will not be able to submit your payment on time for any reason, call up your credit card issuer immediately and request if your due date can be extended or if the late fees be waived to make it easier for you to catch up with your payments. The worst thing you can do when you can’t pay your bills is to ignore the problem or to hide from your creditors. If you are experiencing a difficult situation or financial crisis, opening up with your creditor and trying to work out a better repayment option can make things easier for you.
Consider consolidation. If your credit card debt seems insurmountable, you may consider consolidation by acquiring a secured loan or an unsecured debt consolidation loan. Another possible solution is to apply for a zero interest balance transfer credit card so you can focus on paying only the original amount of debt you owe without incurring monthly interest rate charges.

About the Author

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How to Get Out Of Bad Debt in 2011

bbcred — Tue, 21 Dec 2010 22:51:19 +0000

Are you stuck in a bad debt situation? If yes, don’t feel hopeless. As long as you know the right steps toward credit repair, you can get yourself out of bad debt. This article shows you what to do to get out of debt starting today.

Know your debts. You need to know the exact status of your debts. Begin by ordering a copy of your credit report from the three major credit bureaus. If you haven’t received your free report for this year, you can request for it from Annualcreditreport.com.

Once you have credit report, examine it closely. See to it that all information and charges in all your accounts are correct. In case of errors, send a dispute letter to the credit bureau that issued your report. Upon receipt of your letter, the bureau will conduct a 30-day investigation and if your dispute is valid, you will also receive updated copy of your report for free.

Plan your next action. Once you know the details of your debts, you can start creating your debt repayment plan. Sometimes, taking out a debt consolidation loan is a viable option but this depends on the situation.

Watch out for debt relief scams. A person who is experiencing a problem with bad credit might be more prone to scams. Don’t be afraid to seek the right kind of help. Check out the NFCC (National Foundation for Credit Counselling) to find a legitimate credit counselling agency nearest your location.

Avoid debt relief agencies that promise to bring instance debt relief. There are also fraudulent credit counselling agencies that may take advantage of the situation by offering a debt consolidation loan filled with unfair rates and fees. Watch out for such agencies who are after one thing – making money.

Avoid new debts. Don’t give yourself additional pain and burden by incurring new debts. Credit cardholders need to be particularly cautious about how they use their credit. Make it your resolution not to charge unplanned purchases on your credit card and to pay your charges on time.

Save for tomorrow. Find ways to minimize your expenses and use the money you save to contribute to your debt repayment. As you work towards debt recovery, don’t forget to set aside funds for emergency as well.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loan and credit cards to people with bad credit.

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What Can I Do with My Credit Card Debt?

bbcred — Sun, 19 Dec 2010 21:59:15 +0000

If you own a credit card, then you need to be very cautious on how you use it to avoid the trap of bad debt. Each year, thousands of consumers are caught in bad credit primarily due to credit card debt? This article talks about the steps that a person can do to get out of credit card debt.

Know where you stand. How do you owe your credit card issuer? Are you certain that the charges in your credit card statement are correct? Do you often check your bills or do you just pay your balance without even taking a look at your billing statement? Before setting out to pay your debts, it’s important to be sure that you are not being charged for transactions that you did not make. Carefully review each of your credit card accounts and in case you find unauthorized charges, do not hesitate to dispute them with your bank or credit card issuer.

Prioritize. Do you own multiple credit cards? If you have an existing balance on each account, be sure to check which of your credit cards charge the highest interest rates as these are the ones that you want to pay down first.

Instead of submitting the minimum due payment on each credit card, try to complete your payment on the account with highest rate. This way, you can stop your debts from fast accumulation because of the high rates.

Negotiate. Consider negotiating your debts with bank or credit card issuer. If you have good credit history, use it to your advantage. You might be able to convince your credit cards issuer to lower your interest rate or waive late fees so you can have an easier time paying your balances.

When negotiating credit card debt, ask to speak with the right person, someone who has the power to make decisions. Ask the customer service representative to let you speak with the manager or the supervisor.

Don’t add to the problem. This is not the time to use your credit cards for new purchases. Of course, doing so would only add up to the problem. Paying your credit card debt completely is your main goal and you should do everything to do is as quickly as you can.

Consolidate. Have you thought about debt consolidation? There are actually two ways to consolidate credit card debt. One is by taking out a loan and the second way is to get a credit card with zero interest balance transfer rate. Regardless of which method you choose, keep in mind that consolidation is only the first step. Successful consolidation will still depend on how well you will be able to keep up with your payments.

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Which Way to Debt Consolidation Success?

bbcred — Thu, 18 Nov 2010 00:45:01 +0000

If you are caught in a bad debt situation, one way to get yourself out is through debt consolidation. But successful consolidation will still depend on how you handle your responsibilities. In this article, we will talk about essential points which will lead you towards complete debt recovery:

Recognize the problem.

Some people tend to ignore or deny that they are in a bad debt situation. But avoiding reality will not solve anything. The first step in resolving debt is to recognize that there is a problem. Order a copy of your credit report so you can see the status of all your accounts. Make sure that there are no incorrect details or unauthorized charges. You will be able to come up with an effective debt management plan if you know exactly where you stand.

After making sure that all your charges are correct, calculate your total debts so you can have a better idea as to how much you owe. Don’t let the large sum of your debts discourage you from taking a step forward. Instead, look at it in a positive way and use it as your motivation.

Remember, debt consolidation is only the first step.

Debt consolidation can be done by acquiring one large loan from a lending company and using the money to pay all your debts at once. Consolidating debts with a loan can instantly relieve you of stress in dealing with multiple creditors and enable you to reduce your monthly payments. Nevertheless, debt consolidation does not magically erase all your debts.

Plan your repayment.

The next step is to plan your repayment. Separate your unsecured debts from your secured debts. For instance, if you own multiple credit cards, you may consider debt consolidation by acquiring a credit card with a zero interest rate on balance transfers. By combining all your credit card debts into a single account, you will be able to eliminate multiple rates and fees. More importantly, you can focus on paying the original amount of your debt with no interest.

Adjust your lifestyle.

Every cent you can save by spending less can contribute to debt repayment. Find sensible ways to cut down your monthly utilities. For example, you may give up your magazine subscriptions or subscribe to a lower cable or internet plan while working on debt consolidation.

If you are used to buying a new piece of clothing every payday or every few months, consider giving up this luxury as you concentrate on debt repayment. Rest assured that your sacrifices will be well-rewarded as you enjoy peace of mind and ease once you completely set yourself free from debt.

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Pay Down Your Credit Card Debt Effectively

bbcred — Mon, 15 Nov 2010 00:50:23 +0000

Many consumers today own not just one credit card, but a number of credit cards from different issuers. If this is true in your case, have you found yourself in the middle of debt? Do you sometimes struggle in paying down your charges? If yes, then consider the following tips on how you can pay down your credit card debt more effectively:

Check the status of your debts.

It’s important to make sure that all charges in each of your credit card accounts are correct. It would be a waste of time, energy and money to be paying down charges that you did not owe. Check your credit card bills and make sure that there are no unauthorized charges. If you find illegal transactions, call up your issuer and ask for corrections. Take advantage of your consumer right to dispute unauthorized charges in your account.

Don’t panic!

Even when the problem seems too big to handle, the worst thing you can do is to lose hope and let your emotions take over. If you do, you will be prone to scammers who may try to take advantage of your situation. These scammers may promise instant debt relief and you may accept the offer right away because you do not know what else to do. Keep in mind that no matter how insurmountable your credit card debt seems to be, there is always a viable solution.

Create a strategy.

You need to have a plan on how you will attack credit card debt. It may not be possible to pay all your balances at once so it is crucial to have a strategy. For instance, you may try to pay off your highest rate debt first instead of submitting minimum payment on all your accounts. Or you may pay your lowest balance in full so you can cut down the number of your accounts with unpaid debt.

Negotiate payments.

Call up your bank or credit card issuer and try to negotiate for easier repayment terms. For example, you may request lower monthly fees or reduced rate of interest. You may also ask your credit card company to waive the late penalty fee so you can have an easier time catching up with your payments.

Watch out for fraudulent debt-settlement offers.

Watch out for agencies that offer debt settlement services as some of them are known to impose unreasonable fees from their customers. You may be offered a loan to pay down all your credit card debt in one lump sum payment but you may end up with an even bigger debt problem because of the high interest rates and hidden fees.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans for people with bad credit and credit cards to people with bad credit.

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