Tips on How to Cut Credit Card Debt

Most Americans have too much credit card debt, we've all heard that before, right? Only now its gotten a bit personal... right again? You personally have too much credit card debt and its about to drive you crazy. You may even find yourself making plans at some luxurious spa, to sample of their relaxing (not to mention, extremely costly) facials, massages or treatments. After all, you work hard and so you've definitely earned it since you've been stressed out all month long from your hectic schedule and tight deadlines.

Well there is hope so don't file those bankruptcy papers just yet. One major thing you have to keep in mind is your creditor is probably very willing to work with you. Its in their best interest to have you making some payment versus no payment.

So here are a couple points to help you deal with your credit card debt. The first thing you have to do is simply contact your creditor and let them know your situation. Ask for a lower interest rate or a repayment plan. You might not have thought of it because you're just naturally so polite but it’s a very good strategy to be courteous at all times when negotiating with your creditor.

Polite, but firm. Come across as one who knows what you're asking for and expect to get it. If you're not sure what you're asking for in the first place you might consider a reputable credit counseling service.

There's a lot of great, honest organizations out there whose mission is to help you work things out with your creditors. Next you've GOT to stop using your cards. Cut them up, freeze them in a tub of water, whatever you need to do to get them out of your wallet or purse, do it! You simply can't keep adding to the problem by running the debt up any higher. This is actually one of the hardest parts of cutting your credit card debt. Its like you're addicted to spending money you don't have.

So go cold turkey and drop the habit. Start paying the ones with the highest interest rate first and work from there. How do you do that? Concentrate on those high interest rate cards by paying more than the minimum balance each month. The minimum is just designed to keep you on the hook longer anyway. The credit card companies are in this business to make a profit and want to have you paying them for years to come. Even a little extra each month makes a big difference in the long run. Lastly, keep your chin up and have a good attitude. Millions of folks just like you have begun to cut their credit card debt by following the common sense steps outlined above. You can do it too. Good luck.

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Do Credit Card Debt Reduction Possible?

Everyone wants credit card debt reduction, but nobody wants to give up shopping and splurging. Such is the world of plastic! When you go out on a Friday night, all you want is to blow up a lot of money on a night full of fun. Knowing that you do not really have to pay any cash only spoils the situation further. Moreover, before you know your monthly credit card bill amounts to more than what you had bargained for.

Being in debt is not a matter of choice for people using credit cards. When you use credit, you will obviously owe something to the bank. But you can surely reduce or limit that amount. There are many ways of debt reduction. If you find yourself in the pit of mounting card bills, you can get help in the form of a credit card debt consolidation program or a free plan. Some companies even offer free credit card and debt consolidation.

Tips For Credit Card Debt Reduction

• The first and most obvious tip for credit card debt reduction is to stop using credit cards altogether. Most people will find this tip impractical and difficult to follow. But what you can do is keep the use of credit cards in check. Try to pay in cash as far as possible. Minimize the use of plastic money and use it only in emergencies.
• Homeowners have another option available to them, in the form of home equity loans. Home equity is the difference between the amount you owe to the mortgage company and the market value of your home. By obtaining refinancing on your home, you can cash in on this equity. The money can be used to pay off huge credit card bills to eliminate credit card debt. The debt reduction will automatically reduce monthly payments; hence your debt burden is lowered.
• Debt management agencies are also very helpful in credit card debt reduction. These agencies will negotiate with all your creditors and get you lower interest rates and waived off fees. Credit card debt consolidation will make the debts easier to pay off. Since, you will be making payments to the agency only; you will not have to deal with individual creditors or banks.

The time it will take for you to get out of the debt trap also depends on which credit card debt consolidation program you choose. There are numerous players in the market and you will need a little research before you make a choice. Getting in touch with multiple credit card debt consolidation companies to compare fees and interests is a good idea. Some of these companies even offer free credit card debt consolidation services. Once you hire a debt consolidation company, you are on your way to debt reduction.

It is not very difficult to achieve credit card debt reduction, which, reduces the amount unpaid on your credit card bills and can save you thousands of dollars every year with the help of a low interest consolidation loan. All you need to do is be careful while spending and using the plastic money sparingly when you are opting for a credit card debt consolidation program.

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• How to Repair Your Credit
• Credit Repair Through Debt Consolidation
• Understanding The Credit Repair Basic
• Understanding The Credit Repair Agency
• Tips on How to Repair Credit Score Legally
• Using Secured Credit to Rebuild Damaged Credit
• How Does Consolidation Affect Your Credit Report?
• The Dos & Don'ts of Credit Repair Services
• Credit Repair Clinics: Secrets You Should Know Before Hiring One

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Avoid Cash Advances at all Cost

After receiving your online credit card approval, you sit down and wait for your credit card that offers a 0% intro APR. When you receive your credit card, you realize that it is not enough for your needs. Luckily, you can get a cash advance on your credit card if you need cash quickly. It’s an easy thing to do, and you can get cash from any ATM accredited by your credit card issuer.

Using a credit card, especially for cash advances, is very easy. However, paying it off is not. Read on and learn the reasons why you should avoid cash advances on your credit cards at all times.

The first reason why you need to avoid cash advances on your credit card is the upfront fees for getting some cash. When you withdraw cash from any ATM, you will incur two charges automatically from some of the credit card companies. The first charge will be the processing fee. This could be a percentage of the amount taken or the minimum amount set by your issuer, which ever is higher. The other charge comes from the owner of the ATM, which is another bank. When you receive your bill, it will show the amount of the charge for the transaction fee, which could be a flat fee or percentage of what you’ve taken from their ATM.

The next reason is that the interest that is applied to your cash advance is much higher than your purchase rate. Normally your credit card after the 0% intro APR will be from 12%-18%. However, the cash advance will have a rate from 20% to 25% not including the additional fees that we have previously mentioned.

Another bad thing about using cash advances with your credit card is the application of interest. Your purchase APR will take effect after a month has passed, and it will include all the interest. If you have the money, you can immediately pay off your balance with minimum interest. The interest rate on cash advances is completely different in terms of the application on the cash advance. The moment you withdraw your money from an ATM, interest will be applied to it immediately. Even if you pay it back after a day or two, you still need to pay for the interest rate.

Lastly, and maybe the most hurtful is that cash advances are on your account itself. When you pay for the balance of your purchase, the cash advances are combined on your credit card bill, and the money that you are paying will not go to the cash advance first, but to your purchased bills. This will create a big disadvantage for you since as we just indicated; the rate of your cash advance is much higher compared to your credit card purchases.

This is the most upsetting truth about cash advances. If you can get hold of cash in another way, do it. Credit card advances will cripple your finances and once you get hooked on it, it’s really hard to pay it off.

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• Save More On Credit Card Debt Consolidation
• How to Avoid Student Credit Card Debt
• How to Avoid Bad Credit & Repair

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1 Hour Success to Credit Card Debt Elimination

The road has been a bumpy one indeed, but realize that you are not alone in your quest for financial freedom. Most people that you meet are in the same boat as you are…They are strapped with credit card debt. Unfortunately, many people believe that their only way out is through;

• Filing for bankruptcy
• Living off Mac & Cheese for the next five years
• Or finding some miracle way to earn the money needed to pay off the debts

Well guess what? It’s not about any of these. There is a simple plan for credit card debt elimination that anyone can master. I think back to when I was strapped with debt. I tried borrowing money from family and friends and even tried doing some crazy schemes where I would send a letter and believe the banks would just wipe away the debt because I said it wasn’t mine. It wasn’t until I broke down and started researching the methods that banks use to place you in debt, which I realized how easy it was to get out of debt.

The nice thing is that I didn’t need to hire lawyers or go to court at all. I applied some simple steps and was amazed. In 3 years I was debt free and I did it all with the one small job that I had and I didn’t even need to go to a high priced counselor or debt be gone boot camp. I simply mastered my own destiny and experienced my own credit card debt elimination.

More often than not people believe that they have to be stuck in a certain type of rut until enough time passes so that things naturally take care of themselves or feel that they must locate a way to raise thousands of extra dollars. Not Needed! I researched and found out that there was extraordinary software available that took care of the process of credit card debt elimination and it was free (Debt Knife). I also realized that there were free credit counselors in every major city that were not for profit.

The truth is, do NOT get depressed or feeling like there is no way out for you. By looking through free sites, gathering free software, and speaking to the right individuals, you can be debt free in 3.

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A Viable Alternative to Credit Card Debt: Prepaid Credit Cards

For some people, having a credit card in hand is like giving a beer to a recovering alcoholic. They mean well, but have trouble abstaining. The problem is compounded by the fact that in today’s society, there are many occasions (such as renting a car, selling on ebay or ordering online) when you really do need a card.

This is where a prepaid credit card can be especially helpful. Originally designed for adults with poor credit ratings, prepaid credit cards are also becoming a valuable tool for parents of teenagers. The credit limit on such cards is determined by how much money is placed in the bank. This fact alone can teach an important lesson: if the money isn’t there, they can’t spend it. Rather than enabling us to spend money we don’t have, credit cards should be tools of convenience.

Not Free
It’s impossible to get a late free on a prepaid card, as there is nothing to pay off. But there are annual fees, monthly fees, activation fees, customer services fees, ATM cash withdrawal fees, fees per purchase on prepaid cards and even inactivity fees. So it pays to shop around before picking a card.

There are scammers in the prepaid credit card business too, just as there are in just about any business. If your prepaid credit card company is tacking on $1 every time you use the card, or $10 per month just to carry their plastic, beware. There are better alternatives available, but it’s up to you to find them.

Not always accepted
There are also some gas stations and car rental companies that do not accept prepaid credit cards. The logic behind this seems unclear and the incidences may be minor, but the fact it, your prepaid VISA may not work “everywhere you want to be” and this is one drawback to consider before getting a prepaid card.

Neutral on your credit
While prepaid credit cards won’t tear down credit, they don’t build it up either. If your goal is to re-establish your credit history, a secured credit card might be the better way to go. Prepaid credit cards are a great tool for gift-giving or spending money for your child, however.

The bottom line is you need to do your homework before buying a prepaid card. The bank has to make money somehow, so even the best of deals is going to cost you something. With a regular credit card, the bank makes their money on interest, late fees and penalties. If you have good credit and the willpower to manage a regular credit card wisely (e.g. never charging more than you can pay off each month and never being late on a payment), a regular credit card will always be your less expensive option. But if or one of your dependents really has trouble keeping the balance in check, a prepaid card may be just what the doctor ordered.

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How Does Consolidation Affect Your Credit Report?

Truth is that these processes consist of a cluster of measures that include byzantine negotiations with creditors and implementation of budgeting techniques that need some time to start showing results. But in the meantime consequences on your credit score and history are simply unavoidable. Let’s analyze what they are and why they happen:

Current Delinquent Accounts
While you start a debt consolidation or management program, your accounts and balances being negotiated may be considered delinquent accounts because the repayment is suspended. After negotiations, lenders tend to exclude these accounts from their delinquent reports for credit bureaus. And though this isn’t necessary the rule, it is a fact that can be negotiated among other things. And it can be imposed as a condition for creditors by negotiators to retake the repayment of debt.

The time frame that will determine when your creditors start reporting your accounts as clear and to account for your timely monthly payments is variable and it really depends on the lender and your agent’s negotiation ability. The reasons for this to happen are varied but they basically have to do with the delays associated to any negotiation process that involves borrowers and creditors even when there are intermediaries on a particular field.

What Should I Expect?
Even the accounts that are current once you start the consolidation program should be expected to run late for at least a month or two. Depending on your creditors the situation may be even worse. This is due to the fact that some of them require at least three periods of payments through the agency to reconsider the account state. This implies that your account will show late or missed for at least four months.

All this should be taken into account upon joining a debt consolidation program especially if you think you’ll need finance in the near future. During this period, which can last up to 6 months but usually lasts 4 months top, your credit score will drop due to the missed payments and you’ll find it very difficult to obtain finance. So, don’t forget to mention this fact to the agent that guides you through the consolidation process. If you are going to need finance, it might be a good idea to postpone consolidation for a couple of months.

Also, even if you do not need finance, you shouldn’t be surprised if your credit score drops dramatically at the beginning and you shouldn’t judge the results of the consolidation process till it finally is completed. Or, at least, you shouldn’t worry about your score till after the first six months of the consolidation process have ended.

LiveJournal Tags: Credit Score, Credit Report

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Save More On Credit Card Debt Consolidation

Reasons that can lead to a credit card debt are numerous and far more complicated than simply over-shopping. A sudden medical emergency, costly surgery, loss of a job, sudden death of someone beloved can all potentially escalate credit card debt.

Reasons that can lead to a credit card debt are numerous and far more complicated than simply over-shopping. A sudden medical emergency, costly surgery, loss of a job, sudden death of someone beloved can all potentially escalate credit card debt. It's easy to get oneself into mounting credit card debt. If someone has more than one credit card, things become more complex and unmanageable.

Credit card debt consolidation can be a good solution if you have something to offer as collateral, usually the home you live in. But, things are not so gloomy for those who are not a homeowner, or those who don't have a good credit history. Banking and financial institutions present a good number of options for such people to get themselves out of debt.

There may be lot of options but the poor credit situation and the fact that the borrower is not a homeowner goes against him or her in deciding the terms of credit cad debt consolidation. The lenders when they find that there is no collateral to secure their loan, they hike the interest rates and give a considerable less amount of loan for credit card debt consolidation.

The drawbacks of taking a credit card debt consolidation while not being a homeowner can be tackled to a certain extent if you take the following precautions.

Adopt good financial habits. Don't keep more than one credit card unless you absolutely require and never ever max out your credit card.

Shop around for the best debt consolidation offer. Don't just settle for the first one you get. Take your time and negotiate. If you hire a debt management or a credit counseling organization, be in touch with them constantly. Ask them what they are doing about your situation. Being vigilant and keeping your eyes open could save you a considerable amount of money and avoid unpleasant surprises later.

Credit card debt consolidation is a process to tackle your multiple debts in a more efficient way. Let it be that way. It should not be used to get temporarily relief and waste out on the opportunity. Check out your credit report progressively and make sure that the hard work you did on getting out of debt is reflected positively on your credit report. Keep in constant touch with the credit card counseling agency about this.

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10 Things You Can Do Today To Improve Your Credit

Blemished credit is both stressful and costly, but it’s not the end. As hopeless as the situation might seem, bad credit won’t last forever. There are things you can do right now to begin repairing your credit.

1. Stop using your credit cards.
   In a bad credit situation, one of the worst things you can do is continue accumulating debt by making credit card purchases. Put your credit cards away until you have more control of the situation.
2. Get a copy of your credit report.
   You can’t begin repairing your credit until you know exactly what you need to work on. Obtain a copy of your credit report from each of the three credit bureaus to find out which accounts need work and which are just fine.
3. Clean up your credit report.
   If your credit report contains incorrect information, you have the right to have it removed. Your credit report will include information about disputing inaccurate information with the credit bureaus.
   
4. Get current on past due accounts.
   Your payment history makes up 35% of your credit score. Getting current on your delinquent accounts will have a great impact on your credit.
5. Don’t put in any more credit applications.
   As long as your credit is in repair mode, you should avoid making any more applications for credit. It’s likely that you’ll get turned down for credit and the applications will only decrease your credit score.
6. Keep accounts with balances open.
   You might be tempted to close out credit card accounts that have become delinquent, but wait. Before you close any accounts make sure it won’t negatively affect your credit.
7. Call your creditors.
   Right now they’re certainly the last people you want to talk to, but you’d be surprised at the help you might receive. Talk to your creditors about your situation. Offer to send lower monthly payments for a period of time, until you are able to get on your feet.
8. Pay off debts.
   You will have to start paying off your debts to improve your credit situation. If you don’t have the money on hand, sell off some of your belongings to speed up the process. It will be a sacrifice, but the financial freedom you gain will be worth it.
9. Get help.
   Resources, like consumer credit counseling, are available to assist you. If you are overwhelmed by your credit situation, seek professional assistance. You can locate a credit counseling agency through the National Foundation for Credit Counseling.
10. Be patient.
    Your credit wasn’t damaged overnight, so don’t expect it to improve in that amount of time. Continue paying your debts and over time you will see an improvement in your credit.

    Even small steps toward repairing your credit are better than no steps at all. Start repairing your credit today.

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Credit Repair Through Debt Consolidation

In today's society, it's very rare to meet anyone who doesn't carry some sort of debt. It might be only a small amount of debt, such as an outstanding credit card balance or a store card. It can also be a large debt like a home mortgage or car loan. Nowadays we are all so used to having debt that it's almost become difficult to live without it.

Because it can be difficult to function without even a small level of debt, keeping your credit history clean is now more important than ever. Unfortunately, however, if you get into default on a bill, or miss payments due to a creditor, the credit bureaus will keep a record of it. Next time you want to apply for finance, you may find yourself rejected because of your poor credit history. Having a poor credit rating isn't temporary - many of the black marks against your name will be there for years, limiting your ability to get finance.

That's why credit repair can be a good strategy. There are a number of steps involved, and every individual needs to pursue steps that are specific to their situation. One popular strategy, however, that is effective for many people with credit issues, is debt consolidation.

If you know you're having problems meeting your repayments, it's important to act quickly. The longer you take to fix the mess you're in, the worse it's going to get. Missing one payment may give you a black mark, but missing multiple payments looks a lot worse on your credit history. Credit isn't just "good" or "bad", there's a whole range of levels in-between. So even though your credit might not be perfect, keeping it as close to the "good" end of the scale as you can will still be better for you long term.

Whatever the level of your credit issues, it's a necessary part of credit repair that all your debts are repaid. It's easy to give up at that point and say, "Well, if I had the money to pay the debts, I wouldn't be in this mess in the first place!" This is why debt consolidation works well for many people. You take all of your debts and consolidate them into one loan. If you choose well, you may even be able to get a loan that has a lower interest rate than some of your outstanding debts, reducing your payments. That makes it easier for you to meet your payments each month. Plus you only have to make one payment, so it's much simpler to manage your debt.

One thing to remember is that debt consolidation doesn't reduce the amount of money you owe - that will still be the same. But a lower interest rate, or a longer repayment term, can easily mean lower monthly payments. It also means you can pay off all your outstanding debts, which is the first step in repairing your credit. The defaults on you credit history will show up as having been paid, which is definitely in your favor.

Debt Consolidation is a great way to assist you in repairing your credit, because it improves your financial position very quickly. Instead of being in default to multiple creditors, now you've paid off all your outstanding debts and only have the one loan. It helps to stop any further damage occurring to your credit history, and reduces the pressure of multiple, high repayments. It gives you the chance to start again and focus on meeting your reduced repayments each month. So by using debt consolidation wisely, you can accelerate the process of credit repair.

Related Link: Debt Consolidation & Management Make Easy

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Do Credit Repair Companies & Debt Consolidation Really Help?

You can find ads everywhere selling systems, programs and ways to help you fix your credit in a hurry. Most of these ads seem to enjoy leading with such ludicrous statements like “My credit score jumped 300 points in only 3 hours” or “Smash your debt with only 2 letters” or even “Create a new credit file in only a couple of hours”. It makes you wonder if any of these claims are too good to be true. Well let me say that the answer is both true and false that ALL of these letters seem too good to true.

While many people tend to think that the only thing that can actually fix credit is time, in reality, there are a ton of things out there that can help you to repair your credit score yourself. Time is only one piece in the big puzzle that is credit score repair today. Many different tips and techniques can be applied and all that is required from someone is a little education to fix a credit score or simply raise it to where you want it to be.

Even the Federal Trade Commission states that “anything a credit repair clinic can do for you legally, you can do for yourself at little or no cost”. The key element to anyone’s success seems to be knowing the latest inside techniques and procedures that these credit repair companies use. These involve strategies that have been used for years by credit repair agencies and bureaus to fix consumers credit. Strategies that have become known by names like “Proof of Contract”, “Challenge of Procedure” or “Constructive Notice” are just a few, there are many others.

Even though these terms may sound impressive to the layperson, they are nothing but simple really. What it all boils down to is nothing more than a method of communication that exercises your consumer protection rights and helps consumers to get the results they want. The Federal Trade Commission along with the Credit Rules and Acts set forth by our government are written to aid the consumer and are “pro-consumer” or written for the average person not the Credit Reporting Agencies. Really the rules and acts were written to “Protect” the consumer from these agencies and any unfair practices used by them.

While many people would love to keep you believing that time is the only thing to change your credit score, it is good that obviously you have proved, by reading this article, that you want more information and are willing to educate yourself and fix your own credit score now. Even though the “actual work” for fixing your credit report will take very little of your time, it is vitally important that the information that you use and arm yourself with is good and how you go about it is using the correct techniques.

9 out of 10 courses on restoring your credit will do nothing but lead you into the bureaus snake pit. Once there, it is hard to get out or help yourself at all. Understanding that the Fair Credit Reporting Act, a consumer protection law, which states that “the only negative information which can remain on your credit report is not what is accurate, but what can be PROVED as such” is the first step to understanding what these credit repair companies don’t want you to know.

This is the tool and technique that the 9 out of 10 books will try to help you use, by sending out letters and communication, to try and remove your negative items and improve your score. Under the guidelines of the FCRA, it is definetely hard for these credit bureaus to Prove something as accurate. This works very well for consumers when fixing their scores, but lures people to these self-help books claiming to fix your credit fast, without any real meaningful data. There are books and programs out there that can help you, just make sure you don’t go out and buy the first “cheap” one out there just to find out the information is outdated and never really worked for anyone.

When using one of these credit repair schemes from the wrong book, consumers tend to use the outdated “boiler-plate” dispute letters to help with removing negative items. These letters tend to be outdated and are rarely effective. Nothing more than form letters, these techniques quite frankly may give the credit bureaus and creditors a good laugh at your attempts. Now, don’t get me wrong, there are definetely programs out there which can help the average layperson to fix their own credit and do it the right way. These programs are harder to find, but the good news is that it is for a reason.

The good credit report programs that help you to do-it-yourself are out there, they are just not as cheesy and cheap as the others. If you can find a good program for around $10 on how to fix your own credit, it is no wonder that it is only $10.

Anything that is going to really help you would be worth it and show testimonials from happy customers, have been around for a long time and prove with the information it provides in the sales form, that it is different from the rest and contains some actual knowledge. A good credit report repair program will also offer a money back guarantee and support information as well. More on this article...