The Riddle Around Credit Card Debt

Credit card debt has a habit of creeping up upon you. At the outset you perhaps pay little attention to the fact that your situation is getting out of control. Anyhow, as time passes more of your expendable income is going towards paying down your tiny plastic friends. Then some fine day you decide to take a precise look at your credit card bills, and to your astonishment and horror, you find out that your credit card debt is developing to be unruly.

For a little while you happen to stabilize things by gaining a new low interest credit card, most likely one which has a zero percent transfer fee, for the next six months.

However, keep in mind that pretty soon this inaugural promotion has ended and so this card is also on the excessive interest rates and so the debt begins to elevate again, though on this occasion it is higher still because of the fact that you have been utilizing your cards to make more purchases all through this period of time. Around this time you may even have thought about taking out a credit card debt consolidation loan. You might have even have explored taking out such a loan, and discover yourself back in the place from whence you started out only a year or so after taking out the loan.

And if this picture sounds familiar to you, if you also have gone down the way of acquiring a good number credit cards and basically just don’t seem to have what it takes to free yourself of them, and if you’re now drowning in credit card debt, then you are not alone!

The Secret Surrounding Credit Card Debt

The reason why you, similar to so many people, are stranded in credit card debt relates to a number of considerations which appear to be a huge secret because they are infrequently communicated, and even fewer people are conscious of the implications of these elements.
The secret at the bottom of credit card debt and how you, exactly like lots of people, are entrapped is as a result of the following elements:

• The “buy now and pay later” outlook.
• The “it’s not my fault way of thinking”.
• Double digit interest rates on credit cards.
• Extremely low minimum repayments.

Hastily put, the secret inside your credit card debt lies around the modern society within which we are living in which emphasizes the “purchase today and repay tomorrow” way of life. Within our present world culture, we are constantly pressurized into making purchases and financial actions focused upon keeping up with the Jones’s instead of living within our ability to live. Also, it is compounded by the “do not accept any responsibility attitude”, which is the philosophy at which point we berate everyone else for our problems.

It is this behaviour, which is so popular today, and which makes us feel like a victim. Importantly, when we buy into this approach we then remove our own power, and when it comes to the area of credit card debt, it is this weak thinking which has us registering for a new card or credit card consolidation loan as a substitute for making improvements in our lifestyle instead!

The Correct Way To Lessen Credit Card Debt Is
By Paying A Bit More Than The Minimum Payments.
In the event you already are debating about methods to minimize credit card debt, then you can experience a good array of alternatives that are available for you. Among the practically accepted methods to reduce credit card debt is with budgeting. One of the most useful budgeting techniques is comprised of paying out more than the monthly instalments on your credit cards, each month. If you are have been trying to figure out the best methods to decrease credit card debt through budgeting, then do bear in mind this distinctly valuable debt diminishing option.

At the point when these two mind sets are brought together with your credit cards, with their double-digit interest rates and their low monthly repayments, it places us actively onto the credit card debt roller coaster! Because of the fact that the minimum monthly repayment is designed to keep us in debt, it could take anywhere from 7 to 20 years (depending upon the credit card) to clear it on the minimum payments. And throughout the duration of this, the interest is accruing. Usually most credit card holders just keep on acquiring new things on their cards.

This’s the truth behind credit card debt, It’s why it doesn’t matter how much you try, you just cannot actually manage to get out from under your credit card debt. The method is competing with you and is devised to retain you in a victimized role, by which you just stay tagging along, preserving minimum repayments and praying that matters improve somehow.

Of course conditions don’t ever improve. Eventually the roller coaster has to come to a stop because when conditions definitely get out of hand you get to a stage by which it isn’t conceivable to match the monthly repayments and as an alternative you find yourself defaulting on them!

Effective and also Beneficial Uses of a Credit Card

Self-disciplined individuals can breathe easy since credit cards do come with lots of benefits. By far the most important ones being the ability to save money through a card’s money back or rewards program. For those of you with average to excellent credit, rest easy simply because now you can make a minimum of one percent cash back on all your buys. If you’d like to earn more, you possibly can enroll in exclusive cards that come with up to five percent cash back in select groups which vary over time. That isn’t the end of the story, many card companies have created their very own marketplace with a network of stores who offer reduced costs to their associated credit card customers. In short, if you pay off your monthly card bill completely each time then you immediately put 1 percent money back into your wallet, thanks to your credit card’s reward program. So does that mean that your credit card corporation pays you to use their card? Indeed, they do. This would have been unattainable if every one of us paid back our card balances completely every month. Precisely why so? Men and women who can’t pay back their account balances in full every month shell out interest on their debt which goes to your credit card firm’s earnings basket. Plus it might boggle your brain to discover that the average US consumer credit card debt is approximately eight thousand dollars! If that is not enough data, the credit card organizations gain huge amounts of money annually by charging high APRs to thousands of members who carry balances each month.

Additionally, probably the most useful rewards of utilizing your credit card is the fact that it assists you to create and maintain your credit history. These days you would be regarded as a moron if you did not have a credit score. You may think that you don’t need it. However the hard truth is that you do. Right from small acquisitions to big ones like a house or a car, your service provider would first demand to check your credit history before making an offer. Not to say you could wind up paying very high interest on your loans in case you did not give consideration to creating a spotless credit track record.

As you can imagine that credit cards do come with numerous great tools. One simple yet very helpful one is the capability to maintain a tab on your expenditures. At the moment, most card organizations have tied up with good information technology companies in order to provide you with fantastic account management applications to their customers. Once you are on the web and into your account, you can see all your recent acquisitions at one place. If that’s not enough, they have additionally invested hundreds of thousands of dollars in making sure that their system’s user interfaces are simple and intuitive. And if you are a typical visitor to their site, you can utilize their tools to arrange your buys into different categories with labels and likes. This certainly does help to observe where your money went – internet shopping, gizmos, entertainment, gas, household goods, rent and what not at the end of each month.

If you’ve been making acquisitions with cash, have you thought about the case where your vendor deceived you? What’d you do to get a refund? In a nutshell the answer is countless hassles. However, if you use your credit card to make a purchase and your merchant does something fishy, you can just dispute your financial transaction and that’ll take care of the rest. In the event you lose your card or some steals it you can rest assured that your card provider will make sure that you aren’t accountable for all fraudulent charges that may have been charged to your card. Within a week they’ll post you a new credit card with a different number. Needless to say that credit card organizations invest millions to make sure that they’ve got sophisticated state of the art fraud detecting systems.

For those who’ve got a travel bug like me, you can use your card to reserve your flight ticket, rental car and hotel stay to take advantage of extra insurance of particular kinds (like baggage insurance, airline flight cancellations insurance and much more) and earn special points too. In summary credit cards are a creative method of handling currency in this electronic age. Like anything else if used with discipline and judgment you can easily harvest endless benefits from them.

How to Deal with a Maxed Out Credit Card

Credit card debt is very easy to fall into. The allure of being able to acquire things and services despite lacking the physical money to pay for it is very strong. This is why a lot of people usually end up maxing out their cards.

When you have maxed out your cards, this means you reached the maximum amount on your balance. Usually, people who use their cards regularly to pay for the most basic of things will end up in this situation. This means you have to combine your card payments with your basic necessity expenses. If the credit limit of your cards are high, that will amount to a very high figure. It can eat up almost half of your monthly income. If this is your situation, you know that you have to do something about your current debt.

First things first is to keep your credit cards. Since these are your source of temptation, it is best to get rid of them. If your cards are maxed out, you won’t be able to use them anyway. But to be sure, keep them in a place that will make it hard to access. Some put their cards in a plastic and freeze them in a plastic container.

Once you have gotten rid of the temptation, work on the debt that you have accumulated. One of the most obvious solution is to look for a program that will help you get out of debt. There are many debt relief programs that can be used to help you lower your credit card balance. Your choice will depend on your current financial standing and your ability to pay off your debt.

List all your debts and compute the total minimum payment. Get your disposable income (monthly salary minus basic expenses) and compare which is the bigger amount. If the disposable income is bigger than the minimum, then choose your priority debt. The idea is to pay for the minimum of all your credit cards then take all the extra money and add it to the priority debt. That will allow you to finish paying off the priority debt faster. When you have completed that, you can proceed to put all the funds and add it to your next priority debt. Continue doing so until you have finished paying off your credit card balance.

If your disposable income is not enough to cover for your minimum, you need to enroll in a debt relief program. Depending on the difference between your minimum and disposable income, you can choose among debt management, debt settlement or bankruptcy.

You also need to come up with a budget plan to help you manage your finances. Getting out of debt is a great opportunity to develop the right habits that will allow you to stay out of it. Learn how to save, make wiser spending decisions and grow your income. All of these will help you build up your emergency fund – which will serve as your security net. This fund can tide you over in the event of a financial crisis. You don’t have to max out your cards anymore to pay for basic necessities.

Biggest Reasons for Credit Card Debt – A Credit Card Debt Settlement Program Can Help

Because credit cards can be easy to obtain, it can be easy to get in over your head with credit card debt. While they may be simple to carry and convenient for making purchases, credit cards have been the cause for rising consumer debt and countless personal bankruptcies throughout the years.

According to CreditCards.com, the average debt per credit card that usually carries a balance (in 2015) was just under $7,500. That same source also cites that the average credit card debt per U.S. adult – not including zero-balance cards and store cards – was $5,232. So it’s evident that once you’re in this type of debt, it can be extremely difficult to get out of—unless you have help.
Although the reasons behind these large and growing balances can vary, getting to a credit card settlement solution typically entails understanding exactly why the credit card abuse causes so much debt. After you have a handle on your “why,” you can then move forward on reigning in the “how” of eliminating the debt—and moving on to a more positive and debt-free financial future.

The Downward Spiral of Debt on Credit Cards
Being in credit card debt can be the result of a variety of situations, from poor choices about how you spend your money to changes that have taken place in the economy over time.

Some of the reasons why people may find themselves in credit card debt can include:

Poor Money Habits – It’s likely that the main reason people get in credit card debt is due to poor money habits that are passed down from their parents. For example, if your parents paid for everything with credit cards, then it’s likely you will pick up that trait as an adult too. Poor money habits can also include not saving for the future and/or spending more money than you earn, thus creating more credit card debt as time goes by.

Emergencies/Unexpected Expenses – Unfortunately, emergencies can and sometimes do come up. Car repairs, uninsured medical bills, and loss of income can all have an impact on your financial situation. Oftentimes when these events occur, a credit card can be the fallback source of financing.

Impulse Purchases – Those who have high credit card debt are usually more prone to making impulse purchases versus sticking to a list. They may also have a hard time simply saying “no” when it comes to items that they see and just “have to have.” Unfortunately, the result of most impulse purchases is that you end up with items you really don’t want or need, and you also increase the balance(s) on your credit cards.

Not Having or Sticking to a Budget – While having a household budget can help to keep you on track from a financial standpoint, a recent Gallup poll showed that only one in three Americans actually prepare a detailed budget that tracks their income and expenses. Without a clear-cut budget, it is much easier to spend on unnecessary items, which can in turn, lead to running up your debt.

Cost of Living Increase – The economy is partly to blame too. Over the past several years, the cost of living has outpaced the growth of income. Because of this, many people have had no choice but to cover the “gap” by paying some (or all) of their living expenses on their credit cards—at least until their income catches up. Unfortunately, this can often result in putting you even deeper into credit card debt—especially if there is no end in sight to your current financial situation.

Making Minimum Monthly Payments – Making only the minimum monthly payment on your credit cards can typically result in the debt spiraling out of control even faster. This is due to the enormous amount of interest that is being charged by the credit card companies.

So, what is the solution? There are some ways that you can change your situation. The good news is that the remedies for credit card settlement may not be as far out of reach as you may think.

The Key to Climbing Out of Credit Card Debt
While you may want more than anything to climb out from under your mound of increasing debt, the best way to tackle it is to first have a plan. In some cases, that calls for working with a mentor who can guide you along the way.

This is because simply making payments each and every month may not always be the most effective solution. Depending on the size of your debt and the credit card’s interest rate, going this route could be like chipping away at a mountain with just a tiny ice pick.

Although bankruptcy may seem like the only option for a in some cases—especially if you have maxed out your credit cards—this isn’t the only way out of large sums of debt.

Rather, by working with an experienced guide, you can determine a more viable solution that may be best for your specific situation such as debt settlement or debt consolidation.

Debt Settlement
A credit card debt settlement program can help you save as much money as possible. This process entails negotiating a reduced balance on your total amount of credit card debt that will then be regarded as your full payment. While debt settlement can help you to ultimately pay much less than you initially owed on your account, you also need to be mindful of some things when going about this process.

For example, the lender or collector in a credit card settlement will often report the debt as “settled for less than agreed.” This can be damaging to your credit report – although it is still much better than showing a bankruptcy. Another potential drawback of credit card settlement is that the settlement company will oftentimes charge a fee that comes out of your monthly payment. This isn’t always the case, though, as some credit card settlement companies will work on a performance based system where they only make money once the settlement has been resolved.

Based on the amount of credit card debt you have, a debt settlement program can gear your credit card settlement as either a monthly payment or just one lump sum – whichever makes more sense for your situation. If you are choosing the debt settlement solution, it is best that you not make any additional purchases on your credit card, as this will only increase the amount of credit card debt that you will have to either pay off or settle.

A credit card settlement company will take into consideration several factors, including your overall financial situation, as well as your specific hardship. Also, some of your creditors can be more difficult to work with, so the settlement from each creditor may differ.

When choosing a settlement company to work with, you should consider several factors about the settlement company. For example, not all companies will offer FSCPA violation protection – even though doing so can lead to getting better settlements. Therefore, you should stick with credit card settlement companies that offer this protection.

Also, not all debt settlement companies will offer credit restoration to challenge incorrect information from your credit report. This, too, should be an important item on your list of settlement companies to work with. So, you should ideally look for a company that offers credit restoration when your settlement is complete, and eliminate the others.

One more thing to consider when choosing the best company to work with are customer reviews. Take note, not all reviews are equal. Many of the comprehensive reviews which are found online are paid for by companies to further advertise their services. Real client reviews can be found on third party review sites like Customer Lobby, Shopper Approve among others. A company that has been in the industry for quite some time will have hundreds of reviews over an extended period of time.

Debt Consolidation Loan
If you have more than one credit card balance, debt consolidation could be beneficial. This is because some or all of your balances could be combined into just one loan—oftentimes with just one smaller monthly payment as well as a lower interest rate. This can ease your financial burden significantly.

However, there are some potential downsides to this credit card debt solution too. For instance, the term of your new loan could be quite a bit longer than the term(s) of your original obligations. This could, in turn, actually make your total amount of repayment higher.

Also, if you have to pledge assets as collateral for the new loan, you could end up losing the assets if you aren’t able to pay this new loan back. Having someone assist you with the debt consolidation process can help to ensure that you’re going with a reputable lender and that you’re getting into a new loan that will be within your repayment parameters.

It can be well worth it to check into the solutions that are available to you. And the sooner you do so, the more quickly you can rid yourself of the burden of debt that may be continuing to grow each month. How would this change the rest of your life?

Where to Go From Here
If you’re still working to pull yourself out of the trenches and you need help with credit card debt relief, there are lots of resources available that can help you get back on the right financial track.

Couple Uses Free Credit Counseling and Eliminates $92,000 in Credit Card Debt

It would seem like everybody is in credit card debt these days. From entire countries like the US, Italy and The country of Greece, to your average American individual on the block, everyone is overextended and looking for their “bail out”. Your average American is walking around with over $15, 000 in credit card debt, but then there are the particular exceptions, such as Jerry and Sue Bailey who acquired an unbelievable $92, 000 in credit card debt.
What’s much more amazing in regards to this story is that they managed to avoid bankruptcy, take total control and accountability and managed to make that $92,000 disappear. This type of thing doesn’t happen at the snap of their fingers, there was no magic genie in a bottle. Just hard work and determination set this couple on the road to debt recovery.

This particular massive transformation earned them acknowledgement from the largest non-profit, credit counseling accreditation organization in the US, the NFCC (National Foundation of Credit Counselors). They were honored the Client of the Year Award, the NFCC made their announcement at their annual conference in San Francisco.

$92,000 in Debt Doesn’t Disappear Overnight

Mr. Jerry Bailey, an associate pastor at Grace Church in Jackson, MI, managed to keep the elephant in the closet for over 10 years. From 1992 to 2005 the Bailey’s managed to amass a huge debt load. A leak roof that needed repair, two back-to-back weddings, and a series of unexpected financial expenses put Jerry in the hole.

“My first clue was when the people started calling our house,” Mrs. Bailey stated. “My husband is very loving and very protective, to a fault sometimes.” The final straw was when Jerry was forced to put his daughter’s wedding reception on the credit card, and they finally decided to tally up the total damage of their credit card charges for the past 13 years and came up with a staggering $92,000.

Don’t Answer That Phone; Don’t Open That Mailbox

The creditors were relentless and they never stopped calling. The Bailey’s mailbox was full of bills, and charge card statements. Nobody in their home answered the phone without first checking the caller ID, and if the phone call was from a creditor they would forward it straight to voice mail. Walking to the mailbox was a source of anxiety and stress because they knew what awaited them, a pile of credit card bills.

In 2005 they reached out to their credit union for some guidance, they had a little over $92, 000 in credit card debt distributed across SEVENTEEN credit cards+. The bank viewed their particular dire financial predicament, shrugged his shoulders and recommended that they file bankruptcy. This went against the Bailey’s principals and were firm believers that paying what they owed was the right thing to do. When they affirmed that bankruptcy would not be an option for them, the banker gave them a number for a non-profit credit counseling agency that was based out of Michigan in hopes that they could offer viable alternatives to bankruptcy.

Non-profit credit counseling agencies have been around for over fifty years; their goal has been to help spread financial literacy and help consumers with their credit card debt. They also are generally experts at the skill of negotiation with credit card companies, and utilize a DMP (debt management plan) as an instrument to lower rates of interest, waive service fees and eliminate the overall debt burden for their clients. That isn’t “debt settlement”, which happens to be completely different process all together, which often can end up damaging individuals in the end. Credit counseling and the DMP, for many individuals, is simply the best way to get rid of debt having little if any impact on your overall credit rating.

The Bailey’s difficulties didn’t disappear overnight, it took a lot of hard work, perseverance, determination and 5 ½ yrs to be able to ultimately purge themselves of their personal credit card debt. Today the Bailey’s happen to be savoring their own debt free life, long gone are the nights of evading phone calls and their mail. Today the Bailey’s can altogether recognize the importance of savings in addition to establishing some sort of fiscal safety net for rainy days and nights. The NFCC most recently released a poll that claimed that merely 35% of individuals in America had a $1,000 unexpected emergency expense bank account, consequently there are many individuals in existence are barely surviving check to check, or possibly using their credit cards to cover their bills.

The main thing that they come to understand from this complete financial fiasco was the significance of a savings account. 20/20 hindsight conveys to these people that if they would have saved just a little money every month they would have been less depended on their credit cards. The Baileys’ wish that they could of prevented their financial catastrophe to begin with. “We would tear up those credit cards, ” Sue Bailey says