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September 30th, 2009:

Control Your Credit Card Debt to Control Your Life

Credit card debt is becoming more and more prevalent, especially for those who are struggling to make ends meet. And, the more they use them, the deeper they bury themselves in debt.
Even though credit cards can be convenient to use, they must be used with care. It is all too easy to get into trouble with them. They are essential in building a good credit history, but you should be controlling your credit card use; it should not be controlling you. When you are over your head in debt, using even more credit can be the worse thing you can do. Gain control over your life by controlling your debt.
When you are trying to pay of a card, it is important to not charge anything more on it. The interest alone will make it difficult to pay off. And, never, never be late on making payments. Late payments will add another $30 to $50 fee to your owed amount. You will also have your interest rate raised if you are late with payments. Unfortunately, even just one late payment can cause a credit card company to raise its interest rate. This, in turn, makes it more difficult to pay off. Late payments will also be detrimental to your credit score.
You should have a plan for paying your bills. If you have a bill paying plan, you know exactly when each bill needs to be paid so that you are never late with a payment. Everyone needs to set up a budget; not just people who are deeply in debt. Look at your income and balance it with your expenses. First, be sure that you have enough money to make the minimum payment for each credit card. Once you have the basic payment schedule set, put aside any extra money to pay on ONE of the credit cards. When that card is paid off, take all of the money you were paying on that card and apply it to the next one.
There are software and spreadsheet computer programs that can help you decide which credit card you should pay off first. Normally, it is best to pay off the one that costs you the most money – the one with the highest interest rate. Just make sure that you are paying the minimum on all of the other debts that you owe. And, don’t forget about your day-to-day expenses like rent and food.
When you are trying to get out of debt, you will have to cut down on other expenses. Dinners at fancy restaurants and things like book club memberships will take money away from your main goal: to get out of debt. Use your common sense in deciding what is REALLY a necessity and what is not.
Pay attention to your credit card statements. The company could be charging you additional fees for owning the card (a membership fee) or for credit protection. If you are being charge these fees, cancel the card. Yes, you can cancel it even if there’s a balance owing. The company will keep the account open until it is paid off but other fees (except interest fees) will be discontinued.
Talk to your creditors and tell them if you are having trouble making payments. Ask them to lower the interest rate. They might just say “yes.” After all, they want to get paid. Not all companies will do this but you won’t know unless you ask. Remember, the lower the interest rate, the quicker the card will be paid off.
Take control of your credit card debt. You will also be taking that first step in taking control of the rest of your life.

Get Debt-Free with Debt Consolidation

Within this short guide you’ll find the most important online financial options available for you. There are financial products for every credit situation and this guide will explain all you need to know before you start your search.

Consolidate your debt with a Loan
There are many loan options for those who want to consolidate their debt. If you own a home you can consolidate by applying for an equity loan. The equity you’ve build on your home will provide all the finance that you need to cancel your outstanding loans and other debts. You can also refinance your home mortgage for a larger amount than the outstanding mortgage loan and use the extra cash to cancel the remaining loans, bills, credit card balances and other debts.
Though harder to qualify for, you can also apply for an unsecured loan. This kind of loans let you consolidate your debt by using the money to repay credit card balances, loans and bills without having to use an asset as collateral avoiding the risk of repossession.

Debt Consolidation Agencies
There are also certain agencies and professionals that can negotiate with your creditors so as to lower the interest rates, extend repayment schedules and sometimes, even cut a considerable percentage of your debt that can reach up to a 60%.
Usually this companies and professionals charge a small fee for their services, considering the large amount of money they will be helping you save, it’s not such a big sacrifice. Besides the fact that you’ll get a cut in the interests you pay for finance, the most important thing is that you’ll be paying down the loans principal and thus, reducing progressively your debt till you become debt-free.
Consolidating Debt will provide fresh air to your credit situation and will solve the problem of harassing calls from debt collectors. There are many alternatives for debt consolidation but as any other financial decision a lot of thinking must be done and rushing in is not a wise choice.

Mary Ann Wise, a professional consultant with more than twenty years in the financial field, is currently committed to helping people in the process of securing personal loans, mortgage, refinance or consolidation loans and preventing consumers from falling into the hands of fraudulent lenders. In one of her websites: you will find more useful tips and interesting articles on this subject and other financial related topics.
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