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The high cost of credit card debt.: An article from: Bank Marketing

Free credit card debt consolidation can help you to pay off your debts. Debt consolidation helps you to reduce or save money, which you otherwise pay by way of interest rates and late fee. It gives you respite from harassing phone calls of creditors and works you out of a debt hole. Above all, you do not need to declare bankruptcy to embrace a debt consolidation program. All said and done, you save thousands of dollars every year by restructuring your debts and lowering your monthly payments on your current unsecured debts.

Handling Debt Consolidation

The biggest concern of the US today is its ever-increasing credit card debt, which now tops over $1trillion. According to ARA, the average American carries about $8500 in debt on credit cards. Numerous sites now provide free personal credit card debt consolidation services to enlighten the consumers about the looming danger of debt and help them to get out of their credit card debt. The goal of these sites, some of which are state sponsored, is to eliminate credit card debt and create a debt free nation.

All unsecured debt consolidation qualify, for consolidation of credit card debt services. Debts created on credit cards, store cards, lines of credit, medical bills, judgments, taxes, collection accounts, charge offs, personal loans and old due utilities are some unsecured debts. It is always easy to bring down your credit card debt by refinancing your house. However, this way you will put your house at risk. Look for the safest alternatives to free services credit card debt, bankruptcy and foreclosure.

The credit card industry has widely disparate interest rates, which means that consumers spend thousands of dollars annually just to pay interest on debts incurred on credit cards. Consumers who are carrying a huge amount of debt on their credit cards or even those with modest credit card debt at high rates are turning to companies like Finance Box. This company helps consumers to consolidate their debt into lower and fixed rate loans.

The Internet is providing fast, convenient and solutions that really work well. Numerous companies like Finance Box work with thousands of lenders on the net. Consumer information received by the company drives through company search engines, which evaluates consumer needs, and match them to a lender, who meets the specific requirements of the borrower. This gives these consumers an edge over the ones who deal with a handful of lenders on their own. Consumers save a lot of time and money spent on many phone calls or personal calls. This process fast tracks the process of free credit card debt consolidation, and the consumers normally receive a call from the matched lending company within 24 to 48 hours.

Everyday, we hear the news of the debated economic stimulus package. We sit back and wonder how this will directly help us. Each of us has a unique perspective on the stimulus, and we all have different needs for where, when, and how the stimulus may or may not personally help.

Many Americans are asking about a stimulus program to help the average citizen. People today need help with their rent and mortgages. Even keeping food on the table has become a challenge with grocery prices skyrocketing over the past year.

Previous economic stimulus packages have sent rebate checks directly to taxpayers. Most of this money paid directly to the people was simply forwarded onto creditors to pay down debt. So the previous attempts at stimulating the economy simply sent money into the pockets of the banks and credit card companies. The current stimulus plan does not contain any provisions to send money directly to the people, and the debt balance for most people continues to grow.

For a person with overwhelming debt, any stimulus received would be used to pay down that debt. Without the government’s help, many people are finding that they can create their own personal stimulus package by completely eliminating 100% of their debts from credit cards and personal loans. Instead of waiting for help, they are taking responsibility for their own financial future. Of course, personal responsibility is what this country was founded on.

Without debt, and without the monthly credit card payments, hundreds of dollars per month are saved on principal, interest and other fees. For some people, this can be thousands of dollars per year in savings. It could also be the difference between financial comfort and bankruptcy.

A debt elimination program is not applicable to secured debts such as mortgages and auto loans. Student loans and medical bills also do not apply. But without the credit card payments, extra money would be available to help pay for other obligations in life.

The debt elimination program is not for everybody. It is imperative that some time be set aside to understand just how and why the debt can be wiped clean. An elimination program is not bankruptcy, consolidation, or a home refinance. Having a basic understanding of the premise of the program will also remove any fear that someone has in regards to proceeding with this debt relief method.

A person does not need to become a lawyer to understand this process. You just need to be open to some unfamiliar information. This is time well spent considering the thousands of dollars of debt that can be eliminated. There is also no cost to obtain this understanding, for this is not secret information, just hard to find. You will not be spoon-fed this knowledge from our main information sources, such as television, newspapers, co-workers, and our parents.

By taking control of your debt, you will initiate your own personal economic stimulus plan. And you don’t need an act of congress to accomplish it. A little knowledge can set you free.

Credit cards have revolutionized the purchasing experience since Diners Club released the first credit card in the year 1950.

The Dinners Club credit card gave consumers limited credit
that, at times, even surpassed the personal savings of some
participants. It allowed them to buy items they usually
could not afford if they were to make a straight cash
purchase. It also provided the convenience and safety of
not having to carry large amounts of cash.

On average, American households possess 4 credit cards or a
total of 13 payment cards if debit cards and store cards
are included. There are, actually, 1.3 billion payment
cards of assorted types in circulation in the United States.

But, if you think that credit cards have made the lives of
modern American consumers easier, you may be wrong…

Statistics show that the average credit card debt for each
household in the U.S. is $4,800 per month. Also, there were
1.3 million credit card holders declaring bankruptcy in the
year 2003. This figure is almost guaranteed to decrease
since the change in bankruptcy law. A filer is required to
pay back a portion of their debt if they are financially
able. There are many other changes, mostly for the benefit
of the credit card industry and you can find more
information at:

http://credit.about.com/cs/legal/a/040601.htm

And if you still consider yourself unaffected by credit
card debt, then consider this: upon retirement, most
Americans can only expect to receive about 37% percent of
their annual retirement income because of prior debt
payment. This will leave many individuals depending on the
government, family and charity for economic survival.

These are some scary facts. So before you find yourself in
a position of economic uncertainty, it might be wise to
evaluate your spending and current credit card debt.

If your credit card debt exceeds what seems to be a
reasonable level, you may want to consider credit card debt
consolidation.

So what is credit card debt consolidation?

In a nutshell, credit card debt consolidation is taking all
your credit card payments and consolidating them into one
monthly payment. This way, you don’t have to worry about
managing the payments individually. Aside from this
advantage, it may also provide you with the following
additional benefits:

- Reduce interest payments
- Waive late and overtime fees
- Reduced monthly payments
- Debt relief in a shorter time
- Credit improvement
- Save more money in the long run

There are actually two major types of credit card debt
consolidation…

You may want to consider a Credit Card Counseling firm.
They assist consumers by consolidating all their monthly
payments into one single payment and then dispersing this
to the creditors on behalf of the consumers.

The other type is through a home equity loan or other
secured loan. This is done by exchanging an unsecured debt
(such as
credit card debt) for a secured debt (a debt backed by
specific assets such as real estate).

Now, credit card debt consolidation isn’t a magic balm that
will drive all your credit card debt malaise away. But, it
will make paying all your debt easier and might save you
money in the long run. Definitely an alternative worth
considering…

A change in lifestyle plays an important part in the elimination of debt. A person who is an excessive spender should adopt an attitude of spending less. There is no need spending money and buying something that you cannot pay for. It is always better to note down all the expenses you face in a month and the income you generate. Then if your expenses are greater than income, it sure means you have to limit on expenses! Once you lower your expenses, you will end up with more money to pay for your debt.

The best approach to adopt to eliminate credit card debt is to have your excessive debt discounted. Sometimes, credit card companies accept about 50% or less as payments for the debt if they are convinced that you are heading towards bankruptcy. So write a letter to the credit card company explaining your situation and how you intend to pay off the credit card debt. Including the point that you plan to file for bankruptcy, and intend to settle with willing creditors will compel them to agree with you, lest they be left with nothing!

When paying yourself out of debt, it is always better to pay the high-interest credit cards first. This means that if you have three credit cards, you could pay the minimum for the two cards with lower interest rate. If you allot $300 per month for paying credit card dues, you could pay $60 for two cards as minimum payment. You then pay $180 for the remaining high interest card. Then once one of the lower interest credit card debts gets covered, you pay only $60 to the remaining of the two and $240 to the high interest credit card. This way, you can pay off credit card debt quickly.

Switching to a credit card with a lower interest rate is a great way of eliminating credit card debt. There are many low interest credit cards in the market nowadays; some also offer introductory 0% interest for your first twelve months. Once you open an account in such a credit card company, you have to switch your balance to this 0% bank account. There will be no interest incurred in this account, and so the money you used to pay for interest could be used to pay the actual debt you have with the credit card company. These regular payments will help reduce your debt faster.

There is no point in only making minimum payments to your credit card payments. You have to pay part of the principle, and not only the interest when paying monthly installments. The more of the principle you pay, the lesser your interest turns out to be. You will feel the difference when you see your reduced credit card bills.

If all these fail, you can always turn to a credit card debt consolidation loan. Here you take a debt consolidation loan that will cover all your credit card loans. The credit card debt consolidation loan is usually of a lower interest rate, and can be paid over a longer period. The consolidator will first assess your financial position, and approach your creditors to negotiate for lowered interest rates, and a longer period to repay the loan.

The credit card company usually obliges to this as they prefer a small payment against no payment! Instead of you paying all the credit card companies their monthly payments, you just have to make a single payment to the debt consolidation company. It is up to them to disperse the money to your creditors. With this, you rid the hassles of facing your creditors every month.