Credit Card Debt Program Settlement
If you are deep in credit card debt, you know that the worry of it can become a nightmare. If you can settle this debt, it can give you a new lease on life. It can be a great stress reliever. When you are done with your credit card debt program settlement, you are assured of a better life. If you have been pursued by bill collectors, all those nagging phone calls and threatening mails will become history and life gets a whole new meaning for you.
First of all - Yes, you can get out of credit card debt! If you are determined to do it, you surely can. Though it’s a bit difficult it isn’t impossible. All you need is determination, planning, and perseverence.
You can approach credit card debt settlement in 2 ways. You can do it by yourself or you can take advice from a credit counselling company or a professional. Either method is fine, as long as you persevere.
At the top of the list is: shred your credit cards or put them aside until you are out of debt. Don't buy anything unless it is with cash. Start a cash only lifestyle. When you have this under control then you are on the right path to solving this problem and the following approach will be workable.
Debt Consolidation on One Card
They say that in any given month bulk of the mail is credit card offers. Just take a note of how many mails come into your home that are from credit card companies. If you intend to handle your own debt settlement - save these offers. Read through them and see what in fact they are offering.
Make a matrix of these offers and compare the different ones. Your research starts here. If you can consolidate all your credit card debt on one low interest credit card - you'll have one monthly payment instead of many. This is a big step toward ending your debt.
Draw up a table with the following fields – Credit card name, balance, payment due day (the day of the month by which you are required to make payment of your credit card bill), APR, reward points earned, redemption offers applicable for your reward points balance, remarks.
Fill the table up with data from your credit cards.Figure out which credit card is contributing the most to the credit card debt problem i.e. highest APR and highest balance.
Check if reward points can be used to make partial payments or cover any kind of fees or if the points can be bartered for something you need (spending less means preventing the credit card debt problem from getting worse).
Draw a comparison table of offers available for eliminating credit card debt problem (i.e. consolidating credit card debt). First eliminate debt on the credit card that is contributing the most to the debt problem.
Practice controlled and healthy spending habits (after all you are looking to get rid of credit card debt problem and not aggravate the credit card debt problem).
Balance Transfers
You must know all about balance transfers. In the literature you have gathered look to answer these questions: what is the cost of a transfer i.e. interest, fees, what is the grace period - when can you do it, and how long will the new (hopefully lower) interest rate remain in effect?And the most critical question of them all - will your new card have a high enough limit for you to move all your accumulated credit card debt to it?
If the literature does not answer your questions accurately, call customer service for the credit card you intend to transfer your debt to. Get answers: you don't want to be in a worse position after the balance transfers - and this can happen. Have it clear in your mind what is about to happen and what you must do to facilitate it.
When you call customer services get names and numbers. List this info in the data table. An Excel spreadsheet can be of great help here. Also list the date and time of contact. Accurate records will help you keep sense of all the info collected and keep you organized.
Debt Consolidation with a Home Equity Loan
If you own a home, a home equity loan may act as a consolidation loan. Estimate how much of a loan you need and go to your bank and see what interest rate yoiu could expect to get. THis rate ought to be much less than you would pay if you consolidated your credit card debt on one credit card. Next check and see if other banks in the area offer lower rates - shop around.
Once you have seelcted a bank for the home equity loan, you can start the application process. Realize that there might be fees and a property assessment fee in the application. In any case in the long run you will probably save a good bit of money at a bank. But again ask questions and be assured that it is a good way to go. yo will have to put your house up as collateral and you wnat to make sure you will come out better for it.
If You Seem to Be Going No Where
If you do debt settlement yourself and see that you are making no progress, then it is time to go to the professionals - a debt counseling service.
Debt Counseling Service
First check out the service. Get references, ask hard questions - if the service is reputable they won't mind answering. Do they charge a fee? How much? There free services, so you don't hav to pay a fee.
How do you know that they will mail the payments to your credit cards before their due dates? If they are late with your payments, the responsibility is still yours to be on time, you can be placed in a worse position than when you started.
Once you have selected one - listen to them. They are going to set you on a course that may change your life. They will put together a debt management plan that will guide you to a debt free life so long as you persevere.
Either course you choose - You are making a decision that will make a big difference in your life.
Best of Luck to you!