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on May 26, 2010
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TheTruthAbout...
A common example of this is spending more than you bring in each month. Most people easily know enough math to understand that you cannot keep on paying the bills each month if you spend more than you bring in. It doesn't compute in anybody's book, yet people stop thinking about it and the debt increases with no way to pay it off.
Another common practice is to provide a temporary debt solution that does not really solve anything. This happens when you continually take your current debt and pay it with a credit card or shift the debt to another balance transfer credit card. While this will help someone who is trying to pay it off and does not charge any new debt, it won't work if you keep on practicing spending more than you pull in.
A better idea might be to get serious about your debt and make some real plans about debt elimination. Stop paying precious money you don't have in interest charges and put extra money each month toward reducing your debt. This will reduce it much faster, save you money, and let you make some better plans with that money when the debt is gone.
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on May 25, 2010
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BigBeaks
Reduce Your Debt to Cents on the Dollar
This is a very popular concept given when dealing with this type of business. The truth is that no one can guarantee what another company will do in a certain situation. Credit card debt can only be reduced by the credit card company itself and they can just as easily say "No" as they can say "Yes."
We Guarantee You to Be Debt Free in Six Months
Even if the debt consolidators takes all your credit cards and destroys them (which they probably will in this case), they cannot make such a guarantee, says BankRate. Especially not before they even talk to your creditors. Making such a promise is obviously just to get you to commit to a contract with them. Signing papers makes you indebted to them now, and your debt has probably just increased.
An alternative, suggests BankRate, is to go to a non-profit organization that offers credit counseling services. There may be a small charge of about $20. Instead of billing you for the services, these agencies will bill the creditor for a portion of the debt recovered.
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on May 19, 2010
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lemonjenny
Debt Greatly Increases the Cost of All Things Purchased on Credit
Whether you have a loan out, or simply credit card debt, as long as you are paying interest then you are paying more for your purchase than you would have if you paid cash. The interest really adds up, especially if you have high interest and keep the debt going over many years. That is really making the credit card companies happy.
Just to give you an idea of how much more you are paying, if you have $2,000 of debt on a credit card and are paying a simple 15% interest, then it is costing you $300 in interest each year. Many people owe much more than $2,000, and some have higher interest rates. Over a period of five years, that means you will have paid $1,500 in interest alone, not counting any late payments. Think what you could have bought with that extra $1,500!
Debt Limits You on Present Purchasing Power
If you want to purchase a larger item, you will have to check the balances on your credit cards every time. You have probably already discovered that having credit does not mean that you can just keep on buying when things go on sale. There is a limit to credit. Also, if you had an opportunity to get a good deal on larger items like a car or a house, you would have to turn them down because of the debt you already have.
Debt Prevents You from Saving for Retirement
A sad truth that many people are only now waking up to is that they cannot put any money away for retirement. Money does not grow on trees. Unfortunately, because of undisciplined spending habits earlier in life, many seniors will be reaching their retirement years with thousands of dollars of debt hanging over their heads. Working hard now to get out of debt - and stay out - will help you to put money away for that time of life.
Debt Keeps You One Step from Bankruptcy
It is not uncommon for people to max out their credit cards and become deeply in debt. Making house payments, car payments, and all kinds of credit card debt means that if a tragedy occurred, such as a hospitalization, or unemployment, that a bankruptcy would probably soon follow.
Too many people are living on the edge of bankruptcy now and many are falling in. Start taking some steps now to get out of debt. Here is one way to get started now.
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Debt Consolidation
on May 11, 2010
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stuartpilbrow
If you had not seen this box yet on your credit card bills, it is because it is new, and is now mandated by the recent credit card law which came in full force in February of this year. If those numbers do not look good to you, try calculating how much interest you will be paying between now and that time. It is staggering.
Getting out of debt starts when you get tired of it, then taking action to do something about it. See how much you can increase your payment on your smallest bill when you pay it next. Then keep on doing it and watch the total amount get smaller and smaller, and the interest become less and less. Forego a couple of regular purchases you can do without - such as videos, coffee, eating out, etc., and start getting rid of that debt today.
Starting now taking care of your debt will help you to get out of debt faster. In most cases, you do not need debt consolidation services or a credit card consolidation loan - just make larger payments. Before you know it, you will get to where you will not want to see any more debt - you'll be debt free.
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Debt Consolidation
on May 7, 2010
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TheTruthAbout...
One thing that will hurt your credit score more than anything else is late payments. A larger percentage of the calculation of your credit score comes from this factor.
A debt consolidation company, if it is careless - like some of them are - could make several late payments and increase your debt considerably. It is no concern of theirs, since you will be paying until the debt is completed. Of course, since you are paying monthly, that means that more would go to them, too.
Craig Watts, who is the public affairs senior manager for Fair Isaac Corp (FICO) says "Frankly, we think consumers who participate in credit counseling shouldn't be punished in their FICO scores." You can be sure that not every one who is looking at your credit report will think the same way. Other will simply look at the score and make their determination.
You are better off simply talking to your creditors and getting a reduced interest rate. Then, pay off your bills one at a time, and do not use your credit cards anymore. Discover the beauty of being debt free.
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