When you have lots of credit card debt, you may not be aware of your choices. A sort of tunnel vision happens that many people who are in debt know about, and the focus becomes getting through the next day, week or month rather than thinking about ways to solve the underlying problem: too much credit card debt.
Debt consolidation services are designed to solve the problem of your credit card debt by combining your debt into a single monthly payment to make it easier to pay your bills on time. Perhaps more importantly, it also reduces your interest rate, removes fees and potentially saves you thousands of dollars.
What’s the Catch?
Any time people hear about a great new strategy for getting debt relief, they wonder what they have to give up. With credit card debt consolidation, the mechanism is set up so that everyone wins. You win because you get lower interest rates that let you pay off your debts much sooner, your creditors win because they reduce the amount of risk in your loans by having the consolidator vouch for you, and the debt consolidation company wins because it collects a small amount with each monthly payment. That amount is usually offset by the savings from reduced interest rates, so you may not even notice that it’s been charged.
Debt consolidation also involves very little risk for all parties involved because payments are made on a month-to-month basis. As long as you keep paying the monthly charge, all the monthly payments on your debts will be made. More money will go toward your principal because of lowered interest, which will secure and help your credit score go up.
Many debt consolidation services like Credit Guard also offer credit counseling as a way to improve your overall financial literacy and keep from getting into debt in the future. The best way to stay out of debt is to live within your means, and various personal finance tools such as budgets and financial plans will help you accomplish these goals. The benefits of a strong financial foundation are numerous, and you can begin reaping them with debt consolidation and credit counseling today.Read More
The current generation of consumer credit counseling involves hands-on, practical advice as well as helpful, immediate actions you can use to start reducing your debt today.
To get started, find a credit counseling service that works for you. There are many different options, including all-online counselors, neighborhood-based organizations and groups that operate both online and offline. Credit counseling groups may be non-profit or for-profit organizations. While non-profit organizations tend to be more community-based, for-profit groups have their benefits as well. It is up to you to determine which debt counseling provider will work for you.
Of course, it is always important to do your homework and make sure that the counseling organization is legitimate and respected, so do some research and make sure that the organization has good reviews before you begin.
Once you’ve found the counseling group, it is as simple as contacting them and asking to sign up. You will generally need to provide information on your debts, income situation and other identifying data. This is because most credit counselors offer services known as debt consolidation, which could help put you on a track to pay off your debts quicker and save you thousands of dollars due to reduced interest rates.
This generation of counselors doesn’t just tell you what you should do — it also actively provides services to make your debt situation easier to manage.
When you sign up for debt consolidation, for example, a credit counselor will sit down with you to look over your income, expenses and overall budget. You will then work out a single monthly payment with the consolidation provider that will then go towards making all your debt payments every month. Not only that, but because consolidation involves getting reduced interest rates, more of your money will go toward the principal, leading to the thousands of dollars in money saved over the life of the loan payment.
Finally, credit counseling provides information about budgeting, personal finance and saving. If you need help staying frugal, keeping to a financial plan and making smart borrowing decisions, consumer credit counseling may be the perfect option for you.Read More
Getting out of debt is a worthy goal for anyone due to high interest rates and regular loan payments creating endless payment obligations. High interest rates can take up almost all of your minimum monthly payments, so your balances drop only slowly. Sometimes, your balance actually increases if your interest rates have jumped as a result of making late payments. Your options for debt relief include renegotiating terms with creditors, prioritizing obligations and debt consolidation.
Change the Terms of Your Agreements
Regardless of your chosen method, start by making a list of your monthly bills and payment obligations, and divide your expenses into three categories: essential debts, savings and luxury spending. Sometimes, you only need to cut expenses and give up a few luxuries to free money for paying down your debt. However, if you can’t stretch your income to pay more each month, you need to convince your creditors to lower interest rates or cut some of your current bills.
Debt consolidation services from companies like Credit Guard provide professional counselors to negotiate on your behalf with creditors. Debt counselors study your finances and create a custom debt management plan unique to your financial situation. Creditors will often agree to lower interest rates and drop fees and penalties if you stick to the payment plan. You will soon see how debt consolidation contributes to small cuts in interest rates and how lower monthly payments reduce your owed balances faster.
Prioritize Your Debt
Pay off debt with the highest interest rate first for your balances and minimum payments drop the quickest. After paying off the highest debt, move on to your second highest. Use income tax returns and windfalls to reduce your monthly payments instead of splurging on luxuries. Get into the habit of prioritizing your debts to ensure serious progress in reducing your debts.
Making a few adjustments to your monthly spending is easy. You can save by choosing generic brands, brown-bagging lunches and eating at home more often. Shop seasonal sales, and use coupons for items you normally buy. Opt out on the fancy coffee drinks and learn to make your favorite drinks at home, or aggressively reduce some of your entertainment expenses. Reducing how much you spend daily, weekly, monthly is just one of the many lessons learned as you begin to learn the significance of budgeting. Thanks to debt consolidation, professionals are able to give you options to help you find the relief you need from your credit card debt.Read More