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Credit Card Debt Solutions

Most people have credit card debt for one simple reason: they spend more than they earn. However, there are other reasons why you might have credit card debt, such as a medical emergency, a one-time emergency expense, rising costs, or impulse control. No matter how you got into debt, there’s a solution. Review the situations below to find the right credit card debt solutions for you.


If you spend more than you earn, the first step is discovering why. It could be because your mortgage has recently shot up, leaving you with little money for other expenses. It could also be because you make a lot of impulse purchases on your credit card. If you have high fixed costs, you should consider scaling back on luxuries like cable television, movie rentals, and eating out.

If you spend too much because you like to buy stuff, then you need to learn to ask yourself if it’s something you really need. Wait two weeks before making any purchase. Chances are you won’t really want it anymore. Once you control your spending, you’ll have an easier time paying off credit card debt.

Large One-Time Expenses

If you have credit card debt because of a large one-time emergency like car repairs, your first goal is to pay off that bill as quickly as you can by reducing spending in other areas. Once that’s done, use the extra money to build an emergency fund. Tap the fund for true emergencies, like car repairs or emergency room visits, so you don’t have to go into debt again.

Extended Medical Emergency or Illness

If your family is experiencing a major medical emergency or long-term illness, sometimes credit card debt is the only way to get by, especially if the primary earner is the one who is sick. In this case, your best bet is to negotiate with the doctor or hospital to reduce the medical bills. If the bills are more than you can ever reasonably pay, you may have to consider bankruptcy. Medical bills are the reason for 50% of all bankruptcy filings.

Extended Job Loss or Other Financial Hardship

Many people find themselves relying on credit cards to pay basic expenses after they lose their jobs. If you’re one of them, your first step should be to reduce every possible expense. Cancel cable, cut back on clothing and food purchases, don’t take vacations, do whatever it takes to cut your spending. If you have student loans, apply for forbearance. If you have a mortgage, find out if your lender can also extend a temporary forbearance. If you still can’t pay off your credit cards, consider contacting a credit counseling service for help. They’ll review your finances and may recommend a debt management plan, debt negotiation, or bankruptcy.

Once you get back on your feet, dedicate as much money as you can to debt repayment. You should also establish an emergency fund and continue to spend wisely so that you never find yourself deep in debt again.

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Justin has 5 years of experience as financial adviser; his key areas are consolidation, debt relief, mortgages etc. For more free articles and advice visit
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Credit Card Debt Consolidation, Life Saver For Those Sinking In Debt

One of the excellent approaches towards alleviating yourself from credit card debts is to use credit card debt consolidation programs. A quick note has to be made here; debt consolidation and debt consolidation loans are not one and the same. Here you do not get any loans; rather you get help to payback your debt in a systematic way.

There are many companies that help you get out of debt and also stay out of debt. By signing up with one of these companies that provide credit card debt consolidation services you will be able to get debt consolidation solutions. You may have to pay a nominal fee to avail yourself of these services. They act as a third party while approaching the card companies and try to win a favorable situation for you. Here favorable situation does not mean cancellation of debts or getting any loans, but it means that your monthly payments will be lowered by working systematically on your debt balance. These third party agencies try to reduce the interest rates for your debt and plan in such a way that you will be able to payback the debts in smaller installments with your monthly bills. Along with the reduction of the interest rates, other applicable fees too may be waived off to help you pay your debts fast.

Since the interest for credit card debts are too high, it will be a great help if you can lower your interest rates towards your card debts.Debt consolidation agencies help you with their expertise on debt management. However, you will not be able to improve your credit scores by using a debt consolidation service, but what you can improve is your payment history.

Credit cards debt consolidation services do not take away the problem but it helps you solve the problem. The disadvantage here is that you will have to be faithful to the debt consolidation program and be regular in paying your monthly bills. If you relapse and fail to make your monthly payments then you will not be getting a second chance with your card company. In such cases credit card consolidation service agencies too hesitate to offer you future help as you would be putting that agencys reputation at stake.

Not only people with bad credit benefit from debt consolidation services, also those with good credit can utilize this service so that they dont get into debt, because all those who have got into debt at one point of time were people without any debt and with good credit score. It is through poor handling of their finances they land into problem. Moreover, you can reduce the interest rates and work out smaller installments to pay your bills.


Debt consolidation service is a boon to those suffering from bad debt. This service helps you to handle your debts efficiently and make it little easy for you manage your debt. Third party agencies negotiate with the credit card companies on your behalf and work out a solution to manage your debts and monthly bills. The success of debt consolidation depends totally on you and on how regular you are on paying your monthly bills.

What Is The Better Option: Consolidation Or Negotiation Of Debt

Today, unfortunately, many people find themselves under debt and are struggling to find a way out of their situations. There is no shortage of plans and schemes out there offering a way out of debt. At this time, it should suffice to deal with two major approaches to solving your debt problems and alleviating your financial woes. The first one is debt consolidation while the second is called debt negotiation. Either may prove to be an effective means to remove the weight of your debt load.
Debt Consolidation
If you are considering debt consolidation, you have a few options available to you. Many credit card companies and creditors offer customizable debt repayment plans can consolidate all of the debt and put it under a single payment that has a lower interest rate. There are also debt consolidation companies that specialize in the area of debt assistance. If you apply with one of these services, all or most of your outstanding debts are consolidated into a single monthly payment. This payment is typically lower per month and is offered at a lower interest rate than most creditors will allow.
Since this payment will be at a better rate and cost than you would have paid to credit card companies, you will likely save money each month, which can then be applied to future payments to pay the debt off faster. The big plus that most people attach to debt consolidation plans is that you will be able to silence the voices of multiple creditors as long as you consistently pay the new arranged payment amount with the consolidation company or other provider.
One of the cons of using debt consolidation is that you will be required to cancel all of your current credit cards that are represented in the consolidation plan. There are also fees associated with the plan, such as administration fees, that will affect the amount going towards the actual payment of your debt. Many fees are set at flat rates or set rates for each representative creditor. Bear all of these factors in mind.
Debt Negotiation
Another term for debt negotiation is debt settlement. This is an option that is often related to debt consolidation because most of those who choose to negotiate or settle their debts have shown that they are unable to keep up with the monthly payment associated with a consolidation plan. The person who believes they will not be able to pay that minimum amount, may want to look into debt settlement options to reduce credit and debt issues.
It is an attractive option for many people who have serious debt loads because they can essentially stop paying their creditors if they’ve enrolled with a debt negotiate company. These companies represent the client and work to negotiate a settlement price to wipe out the debt with the creditor. Any payments you make to the debt negotiation company are saved in an account for future use to pay off the negotiated settlement. This is usually a one-time payment that clears the client’s debt load.
One notable drawback with these types of services is that your credit score is often lowered by association with the company for the duration of the relationship. Of course, to offset this, most of the settlement companies will have the creditors gather a new credit report that that notes the total payoff of debt. Furthermore, any other negative effects on your credit can be fixed by credit repair services many of which are offered by the debt negotiation companies.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Debt Consolidation and Bad Credit Remortgage
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Not All Debt is Bad

So you are in debt-who isn’t these days? We live in a society that encourages people to go into debt. Credit card commercials tell us that a trip to Jamaica is just what we need, regardless of whether we can afford it. (That’s what your gold card is for, right?)

Loan brokers want us to borrow up to 125 percent against our home equity. Even the federal government just had its first balanced budget in a generation and now faces the enormous task of paying off over trillions of dollars in debt.

Yet not everyone is in debt. Many people know how to deal with money. Their debts are manageable, and they have money in the bank. That sounds nice, doesn’t it money in the bank? That is what you deserve. In order to get there, however, you are going to have to change some of your thinking about money and learn a few new methods of dealing with it.

Why Are You in Debt?People who are not in debt think about and treat money differently than the rest of us. They know a few things about money and debt that escape the rest of us. Let’s call them the “financially literate.” If you can begin to relate to money as they do, you will be well on your way to a life that is not only debt-free, but also prosperous. What we hope to do in this book is to show you some of their secrets so you can adapt a few of these ideas and tools to help you get out of debt.

Do not feel too badly if you are not good with a dollar, a lot of people aren’t. Money literacy is not taught in schools, and too often parents are too busy trying to dig themselves out of their own financial hole to help much either. Yet, unfortunately for many of us, we learn more about money from our parents than anywhere else. The good news is that learning how to get out of debt and become more financially literate is not all that complicated.

The first step in the process is to figure out how you created so much debt, because if you don’t figure out how and why you got yourself into this pickle, you might get out of debt, but you certainly won’t stay out. So the first question to ask yourself is: Why did you go into debt in the first place?

Sometimes going into debt is unavoidable, but often it is not. When money is tight, you have several options; going into debt is just the easiest. Instead of choosing more debt, you might have decided to work overtime and make more money, or possibly you could have tightened your belt and spent less money. Debt was not your only choice.

There are many reasons people go into debt: some are good reasons, and some are bad. It doesn’t matter. Did you buy luxuries you could otherwise not afford? Did an illness or a divorce set you back financially? Was debt your way of dealing with some other sudden, unexpected expense? When you look at the reason why you went into debt, the important thing is to notice whether your spending habits follow a pattern. If you can see a pattern, you need to address that pattern as much as the underlying debt.

Consider Mark and Diane. They both make a good living: he’s a psychiatrist, and she’s a psychologist. They have two kids to whom they are devoted. They send both to private school, which costs a total of $15,000 a year, and both kids go to summer camp. This expense adds up.

Mark and Diane don’t buy luxuries, they don’t travel much, and, except for the kids’ expenses, they are very frugal. Yet the only way they can pay for everything is by going into debt. They use their home equity line of credit and credit cards to stay afloat. Although they would like to move to a less expensive neighborhood, they can’t because they have no equity in their home, so they are stuck.

What are they to do? If they are going to get out of debt, something in their lives is going to have to change. The private school is going to have to go, camp may be out, or they are going to have to start making more money. The same is true for you. If you want to get out of debt, you are going to have to identify why you went into debt and change that behavior or pattern.

Good and Bad DebtDebt in and of itself is not a bad thing. Both of us (the authors) were able to start our own businesses because of debt; Steve began his own law practice, and Azriela began her own entrepreneurial consulting business. So we understand what debt is and why some debt is great debt.

Debt allows you to do things you otherwise normally could not do, such as start a business, go to college, or pay for a home. Debt constructs buildings and funds investments and entire corporations-even the government is funded by debt. The trick is to foster debts that help the cause and banish the ones that don’t. Not all debts are bad debts.

Good DebtDebt that helps you, enriches your life, is manageable, and is not a burden can be called good debt. For example, student loans are good debt if they enabled you to get through school and further your life goals. They are bad debt if you dropped out of medical school after one year to become a writer. A good debt helps; a bad debt hinders. We want to help you get rid of that bad debt.

Other examples of debt that may be considered good include:1. Home loans. A mortgage can be a great debt. Not only does it permit you to own your own home, but it also allows you to build home equity. People who are financially savvy earn interest and equity. People who are not financially savvy pay interest and create money for others. For example, charging groceries means that you will pay about 17 percent interest on items that will be consumed within a week. A financially literate person would never do that.

2. Car loans. A car loan can be a fine debt because you get something long-lasting out of the debt. If you need a nice car for your job (if you are a real estate agent, for example), a car loan may be considered good debt because it helps you in your career. However, a car loan that you cannot afford is a bad debt because it detracts from your life.

3. Business loans. If you can service the loan, and it helps you make more money, the loan is good debt, but if the loan is nothing but a source of problems for you, the debt is bad.

4. Credit cards. Credit cards are fantastic. They are convenient and easy. They can help finance a business or even medical emergencies. The problem with them, as you probably know only too well, is that it is too easy to fall under their siren spell and get in over your head before you know it. That’s when they begin to hurt your life more than help it.

Bad Debt BluesHow do you know if your debt is good debt or bad debt? Easy. Bad debts cause stress. You sleep poorly because of them. They cause fights and foster guilt. Supreme Court Justice Lewis Powell was once asked to define obscenity. Hard-pressed to come up with a definition, Powell uttered the famous line, “I know it when I see it.” The same could be said for bad debt: You know it when you see it, and it certainly can be obscene.

Bad debt seems impossible to pay back. You create bad debt when you charge things you don’t need or when you borrow for things that you consume quickly, such as clothes, meals, or vacations. The things quickly disappear, but the debt has a nasty habit of sticking around, seemingly forever. Bad debts can become very bad debts because of interest and penalties. For example, if you buy a CD player for $200 and don’t pay it off by the end of the year, and your credit card company charges a usurious 20 percent APR (20 percent per year), you owe $220 by the end of the year. If you do this with five items, you owe $1100, and that’s a lot of money.

Money TalksTight for money? Here are some simple ways to save a little extra: Don’t use ATMs at other banks and avoid $2 user fees; cancel your movie channels on cable and save about $20 per month; put all of your change at the end of the day in a jar and save about $50 a month; hold a garage sale and make about $200; cancel your cell phone and save $50 a month.

You can create bad debt when you agree to pay these crazy interest rates that some creditors charge, because the debt seems to grow exponentially. Credit cards are the prime culprit, but they are by no means the only one. High interest can also come with personal loans, business loans, or unpaid taxes.

You know what the bad debt dance looks like, anyone reading this book does: New bills are coming in before you’ve cleared out those from last month. You’re surprised to find that the phone bill is still unpaid. Somehow the dentist was never sent his check. You know what past-due notices look like. Your Visa and MasterCard bills include late payment penalties. The hardware store sends a letter telling you you’re past due and requests that you send a check at once. There is more month left at the end of your money, and payday seems far away. Worst of all, these things don’t surprise you anymore.

Avoidance is a common coping mechanism to deal with a budget that doesn’t balance. The problem is, it can create even more problems than you already have:

Your property could be repossessed. The finance company can come take your car. The electronics store can come take its TV back. You could get sued. If that happens, your wages could be garnished, or your bank account could be levied upon. Imagine your surprise when you go to get that $1,000 out of your checking account to pay your mortgage and you find that it has been seized by one of your creditors.

A lien can be placed on your real estate. Failure to pay a bill now means that a creditor can get a judgment against you and force you to pay it later when you sell your house, only then you will pay it with 10 percent interest per year.

Loss of services. You could lose your insurance or your utility services if you avoid paying those bills.

Yet, as much as you have been avoiding the problem, the truth is that your debts are neither crushing nor hopeless. They are simply a problem-one for which there is a solution. But no one ever eliminated a problem until he or she recognized and admitted that there was a problem. You began to do that the moment you read this articles. As you read it, you will need to begin to formulate a debt-reduction plan that will work for you. As you do, you need to determine which debts are necessary and which are not.

Debts You Want to KeepSteve, one of the authors of this book, is a bankruptcy attorney. One day, an old acquaintance named Bill came into his office and said that he needed some help getting out of debt, but he also wanted to avoid bankruptcy if at all possible. They talked, came up with a plan of action, and Bill went on his way. About four years later, Steve ran into Bill again and asked how things were; Bill relayed the following story.

Bill had $30,000 in credit card debt and was behind two months on his mortgage when he left Steve’s office. That day, Bill finally decided that something had to change. He wanted to pay everyone back, put some money in savings, and keep his house. His mortgage was his largest, and favorite, debt because he loved his house.

Bill’s first order of business was to prioritize his debts. Wanting to save his house, Bill called his lender and found out that it had a program that would enable him to roll his mortgage arrears onto the end of his loan. He was therefore able to keep his most important debt and focus his energies on getting rid of the debts he didn’t want anymore.

Bill put together a credit card repayment plan. He started living a bit more frugally, making some extra money by moonlighting, and paying more on his credit cards than the minimum. He was diligent, but not always perfect. Although it took him several years, he finally did get out of debt. He also kept his house and even created a little nest egg. Bill did it, and you can too.

Debts to Get Rid OfIf you want to prosper financially, there are plenty of debts that you will want to wipe out. The most obvious are those where you are paying high interest and penalties, things such as credit cards, lines of credit, taxes, or any other debt that is much higher than inflation. In this articles, you will see how to formulate a plan that will enable you to get out from under these burdensome debts. But as you contemplate this plan, you also need to prioritize certain debts and pay them on time:1. Rent or mortgage. Make paying your rent or mortgage a top priority. Payments on a home equity line of credit or second mortgage are also essential because you can lose your house if you don’t pay.2. Car payments. Make the payments. If you don’t, the car will be repossessed.3. Utility bills. These services are important, and the bills usually have heavy late payment penalties.4. Child support or alimony. Not paying these debts can land you in jail.5. Taxes. Taxes may be put off for awhile if necessary, and we show you how to do so later on in the book, but if the IRS is about to take your paycheck, bank account, house, or other property, you should set up a repayment plan immediately.

The First Rule of Holes: Stop Digging!The goal of this articles is to help you get out of debt within the context of making your life work. You will not be asked to make radical, unreasonable changes in your life because doing so rarely works. Instead, important, sometimes gradual, small but significant changes can make a big difference.

If you are going to start getting out of debt, you have to stop going into debt. One way to start is to begin to wean yourself from the credit card teat if you think that is part of your problem. You don’t have to cut up all your credit cards; that would be impractical and unreasonable. Start slowly, but build up to it and get strong. You can do it. The only way to stop going into debt is to stop going into debt. You might as well start now because the sooner you start, the sooner you will get out of debt. The longer you wait, the longer it will take.

We will show you how to easily trim your budget (well, almost easily) so that you need not incur more debt to stay afloat. But begin now. You are going to have to stop sooner or later. Down the road you will see that this is one of the most important steps you can take in getting out of debt. You will thank yourself for this gift. Remember the first rule of holes: Stop digging!

Long-Term GoalsNow is the time to begin to think about your long range financial vision. What is it you hope to accomplish by getting out of debt? Changing some habits?

Paying off your MasterCard? Probably what you really want is a less stressful life, one that’s free from money worries. But you can have even more. Getting out of debt is one thing, but prosperity is another thing altogether.

You have read this once already, and you will read it again in this book: If you don’t begin to do some things differently, to change the way you think and treat money, you might get out of debt, but you won’t stay out of debt. If you do make some simple changes to your thinking and your behavior, not only will you get out of debt, but you also will get ahead. You will get what you deserve: a life of abundance.

The Least You Need to Know1. Going into debt for essentials makes financial sense; doing so for nonessentials does not.2. Not all debt is bad debt.3. You may want to keep debts that enhance your life and get rid of the rest.4. Stop adding to your debt right now.5. Cultivate a long-term plan of action. offers comprehensive guide to credit reporting, including information on repairing or rebuilding your credit history.


 offers comprehensive guide to credit reporting, including information on repairing or rebuilding your credit history.
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Paying Attention to Budget’s and Managing Payments After Consolidating Debt

Experts in the financial market recommend paying high interest debt first such as: credit card, personal loans and mainly unsecured debts. If you have money left over after consolidating your debt, you may want to pay off secure debts such as mortgages. Once there isn’t any cash left over from the consolidation loan, proper money management has to be done on monthly bases, to prevent rapidly building credit card debt.

Two, Maximum Three Credit Cards per Household

The fewer credit cards you have – the better! If you are single, there isn’t any reason for you to have more than 1 credit card if you have found yourself once in debt. Cancel any extra credit cards you posses. You will find managing your monthly payments to be easy, because you have fewer payments to make. Depending on the size of the family, the number of responsible adults, and if there is more than one source of income – more than one credit card can be useful, conditioning it as a must.

Don’t Forget about Paying Back the Loan

The consolidation loan you have obtained naturally has to be paid back. When managing how you will spend your income, remember to calculate the loan repayment and any other mortgages or loans you should pay.

Tightening Your Budget

Living a comfortable life is always pleasant, but, not always possible. Save as much money as you can by spending less. Use coupons and buy only what you need. Learn from your debt problem and live a financially balanced life. You may get bad credit debt consolidation loans online, but do some research before.

If bad credit is an issue you may liquefy your home equity with a home equity loan for bad credit and compare online mortgage refinancing loans.
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The Importance of Bad Debt Consolidation

Most people would rather ignore debt than attempt to get rid of it. Unfortunately, it is precisely this mindset that probably creates the debt in the first place – an unwillingness to grapple with reality, to look at all options available, and to take a reasonable, corrective course of action.

If you’ve already built up giant piles of debt, but have no reasonable means of paying them off in the periods specified by your creditors – if you’re already beginning to ignore and default on payments – then it is time to do something about this problem. If you don’t your credit will slowly shrivel away – and for no real reason at all – then you need to consider using some form of bad debt consolidation.

Now, what’s important to note is that you have several, not one, means of obtaining a bad debt consolidation. A good place to start, however, is to take a general survey of your debt to determine the amount you owe, the amount you’re delinquent on (should have paid), and what your interest rates and payment schedules are for all of your sources of debt.

If you’re not delinquent on any payments yet, but things are spiraling out of control, that’s actually good news. You more than likely have good credit now. This means that you can use credit card consolidation as a means of bad debt consolidation. You should start by finding and applying for several 0% APR trial-period cards. Once you receive these cards, you will want to use the transfer balance option to move debt from your current cards to these 0% APR cards. This will allow you to simply make the minimum payment each month for the entire year without accumulating bad credit or interest. In fact, your credit will actually improve by making minimum payments.

Now, this takes care of your unsecured debt – or debt not backed by securities, such as a home – but for your secured debt, you wont be able to use a credit card. Instead, you’ll have to take out a bad debt consolidation loan. If your credit is still reasonably good, this wont be too hard. If you’ve already defaulted on several payments, you will want to contact a debt consolidation company and talk to a debt counselor for free. He/she will take account of all of your current debts and then help you find a best course of action. In many cases, the debt consolidation company will even bargain with your creditors on your behalf, getting as much debt canceled as possible.

One thing you will want to consider carefully when entering into a bad debt consolidation contract is what your monthly payments will be and what your interest rate is. If you were already struggling with payments, it is probably a good idea to go with the lowest payment plan available (i.e. the longest contract) and the lowest interest rate possible by putting up securities as collateral.

If you follow the steps outlined above, you should have no problem consolidation your debt and starting down the path to a debt free life – or at least a considerably less stressful one.

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