Credit Debt Management –- Get Your Life Back!

How could something so small and made of plastic that can make us happy with it service turn our life upside down?  If you haven’t figured it out, I am talking about a credit card.  Though credit cards can be used for good it is not uncommon for credit cards to cause much hardship in your life…  in many cases this is the adverse effect that generally comes from using credit cards.  Can you say, bad credit debt?

Bad credit debt leads further into bad credit debt management and once you realize the death spiral that is taking place you need to get back that control and maintain good financial management practices.

Here are some credit card handling tips that you can follow for to help you get past bad credit debt management:

• Make your credit card payments on time!  This is utmost important!
• Build a good credit history by choosing when to use your credit cards wisely.  Generally speaking bad credit purchases are things you do not need.
• Review your credit card bills making sure it is free of error.
• Analyze your credit report.  You can contact credit rating agencies if there are any discrepancies. 
• Do not apply for more credit cards if you already hold balances on  your current credit cards.
• You can transfer a balance off of a higher interest rate credit card to a credit card with a lower interest rate.
• Know the fine print!  It is common for a credit card company to raise your interest rate if you are late on a payment.  
• Avoid gas, rewards or departmental store cards as these types of cards carry higher interest rates.
• Contact a credit debt management agency for help if you feel like your credit debt is out of hand.

You can always take the assistance of bad credit debt management companies if you are in bad credit debt.  There are many credit debt management companies and you can find many online.  You will be able to figure out the services each bad credit debt management company offers to help you make the best choice for your needs.  Some services may include bad debt credit counseling, credit card education, and bad debt credit card consolidation services. 

If you decide to go the route of a bad credit debt consolidation service, you will take out a bad credit debt consolidation loan making your monthly repayment into one single bill if you have more than one credit card with bad credit debt.  A bad credit debt consolidation agency will pay your creditors the amount they negotiate on your behalf.  You will be charged with a certain percentage of the total debt payment for bad debt credit cards for using this service.

Most of the time, it will only take about 15 minutes to enroll for a bad credit debt management agency.  After enrollment a representative from the agency will contact you and will go over everything with you.  This will help you get control of your bad credit debt and help you live a more stress free life.

Clearing Bad Credit Debt by Credit Debt Consolidation

Many people have allowed credit cards to consume their financial stability causing a fall into credit debt.  Owning a credit card is a huge responsibility and should be handled with consideration in each purchase.  Misuse of a credit card, even within a very short time frame can cause adverse events to take place such as bad credit debt or even in the long run bankruptcy.

For those who have bad credit debt may consider credit debt consolidation loans.  Credit debt consolidation loans can lead a person to stay clear of bankruptcy.  Those who deny credit debt consolidation and other opportunities when a person is deep in bad credit debt are just increasing the odds of falling further and further into in to bad credit debt until bankruptcy is the only viable option left.

Just because you have bad credit debt and your credit score isn’t where it should be doesn’t mean that you will not be approved for a debt consolidation loan.  The new generations of lending agencies have become more receptive of such issues.  It is more common especially in this society.  In other words, it is more likely to get a second chance even if you have bad credit.

Bad credit debt consolidation loans are similar to standard debt consolidation loans.  The difference is mainly the terms will be a little more strict.  The reason the terms will be stricter is the fact that the lender is at a higher risk.  The interest rate will be increased and the amount borrowable will be decreased.  Bad credit debt consolidation will have differences in terms and will provide protection for the lender against future risks of non-payment of the amount borrowed.  

When performing a bad credit debt consolidation you should know that the interest rate is one of the most controversial matters.  You will feel like you are at the mercy of your loan provider since they are allowing this type of loan; conversely, it is not as discouraging as it may seem.  You can shop around and research your lenders before you decide on one.  

The APR on a bad credit debt consolidation loan will be well outlined.  You will want to go through a list of banks and compare interest rates.  An online comparison through loan calculators will also be helpful and save you time when considering a bad credit debt consolidation loan.  

Do not forget to seek expert guidance by loan providers of bad credit debt consolidation loans.  Guidance to help you understand your options and the settlement process will help you make a more sound decision on what is best for you. 

The same process will take place as a standard debt consolidation loan for a bad credit debt consolidation loan.  Once you have presented to the lending agency your list of debts they will go through them with a fine tooth comb- so to speak.  You can contribute any direction you want to help the lender understand your list of debts that you want.  Just remember that the lender will be able to see within a second what type of debts you hold that show importance.  

You must understand that bad credit debt consolidations are costly but any type of bad management buyout will be.  Because of bad debt management the consolidation of bad credit debt consolidation loan will add to the debt instead of eliminating them.  This will be a life decision that will affect the rest of your life as must is at stake. 

Credit Debt: Good Credit or Bad Credit

A debt-free life is near impossible in this world today and it is important to know both sides of credit debt.

Credit debt is not always a bad thing.   

In some cases good credit debt can be helpful to your financial situation.  Knowing the difference between good credit debt and bad credit debt is important.  Good credit debt and bad credit debt will affect every loan possibility you come across within your life.  Whether or not you get a good interest rate will be determined by your credit debt and your credit score.  In some cases good credit debt or bad credit debt could be the deciding factor in some job opportunities that you may apply for.  

How do you know if you have good credit debt?  Good credit debt will include anything that you need but is too expensive to pay cash for.  A home mortgage is an example of good credit debt.  Another example of good debt is financing a car loan.  In any type of loan make sure to shop around for the lowest interest rates you can find. 

A mortgage is a great way of helping you receive excellent credit if you keep your monthly payment within your budget and pay your bills on time.  Often mortgages have lower interest rates than high interest debt.  Credit cards are considered an example of a high interest debt.

You can increase your credit score rating by having good debt and making your payments on time.  A good credit score rating allows you to get lower interest rates when taking out loans which save you money.  Sometimes taking out a home equity loan makes sense to pay for a car because the interest rate is lower than an auto loan and the interest is tax deductible.

What is considered bad credit debt?  Bad credit debt is merely anything with a high interest rate on things that you really do not need.  Say you take a vacation even though you really cannot afford to go on vacation.  You put all your expenses on your credit card, this would be an example of bad credit debt.  

When owning a credit card you must remember to use your credit card for your benefit.  Research what you should and should not put on your credit card.  Make sure to know your good credit debt and bad credit debt as this is crucial to have good financials.  The reason the worst type of bad credit debt is credit cards is because credit cards carry higher interest rates.  Credit card debt is also the path most people take when they stumble into bad credit debt.

If you have bad credit debts don’t give up!  There are ways to recuperate.  The smartest way to get back on your feet is to pay your credit card debt down or pay it off.  You should pay your highest interest rate credit card off first and work your way down.

Another way to acquire bad credit debt is by not paying your bills on time or by not paying your bills at all.   Once your credit score rating is affected by your bad financial habits, your financials will be hurt drastically.  You will face higher interest rates and bad credit scores until you repair what you destroyed.  You will face not being able to qualify for loans, credit cards, or even might keep you from your dream job.  It will take a long time to get back where you were, but with time, diligence, determination, and a good plan you can make it through.

American Express's Prepaid Offering: They Took Out The Fees!

Not all prepaid “credit” cards are bad; take American Express’s newest prepaid card.  Most prepaid cards get a bad reputation from charging a ton of fees, just look at our previous article entitled “Visa Prepaid Card from Wal-Mart” to see how many different fees I am talking about.  American Express’s newest prepaid card decided it would be better to keep the fees to an absolute and almost bare minimum.

The American Express prepaid card doesn’t carry any fees to load money on to the card and you car purchase it online as well at no cost.  It is accepted anywhere that American Express (AmEx) is accepted and it doesn’t carry and monthly fees.  The only drawback that I can see is that there is only one ATM withdrawal per month, so if you think you’ll need to make multiple withdrawals, you may want to reconsider this card.

American Express is known for charging their merchants high fees to process the transactions.  This is probably why you aren’t being charged through the nose and this can benefit you in the long run.  As a final note, this is a great card for anyone who needs to carry money without carrying money, as long as you are going somewhere that American Express is accepted and as long as you don’t need to make a lot of ATM withdrawals.

Visa Prepaid Card from Wal-Mart

As previously discussed in another article entitled, Credit Debt Pitfalls, not even prepaid cards are exempt from their hidden fees and pitfalls.  Here is a simple breakdown of the Visa Prepaid Card from Wal-Mart.

• Monthly Fee:  $4.95
• Loading Fee/Re-Loading Fee:  $4.95
• ATM Withdrawal Fee:  $1.95
• Cash Advance Fee:  $4.00
• ATM Balance Inquiry:  $0.50
• ATM Declined Withdrawal Fee:  $0.50
• Stolen Card Replacement Fee:  $10.00
• Customer Service Fee:  $3.50
• Statement Fee:  $2.00
• Automated Phone System Fee:  $0.75
• Phone Operator Fee:  $0.41 per minute, up to $1.00

Don’t say that I didn’t warn you.  Now you have been alerted to the excessive costs with using a Visa Prepaid Card from Wal-Mart.

Debt Credit Consolidation Tips

Interest, interest, interest…  Paying interest on your credit cards, automobiles, medical expenses, mortgage, and basically every bill you acquire adds up and puts your bank account in a death spiral very quickly.  Debt consolidation might be the answer for you even if you are one of the millions with bad credit debt.

One must consider carefully all options when looking at their financials especially when they are dealing with bad credit debt and debt consolidation.  For someone with bad credit debt there is light at the end of the tunnel.  Having bad credit isn’t the end of the world and for those that set back and plan out what they need to do with their unpaid debt generally see that debt consolidation is a viable option. 

It is possible to take out a debt consolidation loan with bad credit.  A debt consolidation loan can help reduce the bad credit debt significantly.  Although, bad credit debt consolidation has its pros and cons, it also is an important step in debt management and bad debt consolidation.  In many cases bad credit debt consolidation is the most helpful option for someone with someone that has bad credit debt; however, this may not be the right solution for a bad credit borrower to take.  Make sure to look at all your options before choosing your first step.

A lower interest rate is one of the best advantages of bad credit debt consolidation.  Lowering your interest rate will not only help you save money in the long run, but it will help you pay off your bad credit debt faster.  While you are searching for options make sure to make lowering your interest rate your top priority.

Home equity loans are the most common bad credit debt consolidation motives and this is generally known as a second mortgage.  Home equity loans are secured loans as your home is the liability.  Sincere consideration should be completed before locking yourself into a home equity loan to consolidate your bad credit debt.

There are also unsecure options to consolidate your bad credit debt.  Just remember unsecure loans have no security and will most likely ask for higher interest rates for their compensation.  This can work if done right.  You will need to know your credit score before you apply for a bad credit debt consolidation.  You can get a credit report yourself at various free credit report sites online.  Once you know your score you can determine if your credit score will need help or not.  If it does make sure to get it has high as you can before taking our an unsecure bad credit debt consolidation loan as any raise in your credit score will help you get as low of an interest rate as possible.  Remember any little bit will help at this point

Make sure to get a lower interest rate when you consolidate your bad credit debt.  This will help reduce your monthly payments and you will be able to put that extra money toward paying off your debt faster.  It is good to know that sometimes bad credit borrowers will pay attention to the lower monthly payments instead of the lower interest rate.  Don’t make this mistake.  Lower monthly payments can cost more over a longer time span.  Make sure to lower your interest rate.  

When doing your research make sure to get a copy of the cost of bad credit debt consolidation loan.  Also, make sure you get quotes from various loan lenders and compare them.  This will help you make the best decision for your bad debt consolidation.  

Once you decide your debt consolidation loan lender will then deal with your previous creditors leaving you owing only one creditor.  Make sure to select a debt consolidation lender who you trust will make your payments on time.  Some debt consolidation lenders have been known to delay or even miss payments which in turn cause you to end up in deeper bad credit debt.

Do not expect your bad debt consolidation lender to improve your credit rating because that will not be the case.  Although, a bad credit debt consolidation can have a positive effect on your credit score rating, you will need to make sure you pay your payments on time as making on time payments can slowly improve a bad credit rating.   You should plan to repay all your bad credit debts within 3 – 5 years.

Beware of predatory lending who promise to take care of everything.  None of your debts will disappear in a snap of a finger.  It is a process that takes time.  Do your research before deciding on which option to take.

Credit Debt Pitfalls

You don’t have to look far to see that everyone seems to want to loan you money, and then they want to help you consolidate all of your debts.  I’m sure you always heard the saying, the grass isn’t greener on the other side, and this is true in credit debt and credit debt repair techniques.  Many credit debt repair techniques aren’t helpful in any way and chances are they can affect your credit in a negative way just as badly as not paying your credit debts off anyway.

It is best to stay away from the low or no interest rate credit card offers.  There is a reason that a credit card is willing to send you these offers.  It isn’t because they think they are helping you, they expect you will miss a bill or two and then those rates go sky high, and believe me that is what they want.  They aren’t your friend, so remember this the next time you get a credit card offer like that.

Some companies focus on transfers, requesting that you transfer your current balance over to another credit card with a “lower” interest rate.  Generally, this “lower” rate is for a short period of time, and them WHAM, they hit you with a rate almost out of this world.  At this point, you can rest assured, if you were hurting to make payments, you will really be hurting even more soon enough. 

Just because a company advertises a sale doesn’t mean you are getting the sale.  Just think about it.  You might be saving five percent today, but if your credit card has a nine percent interest rate, then you are actually spending four percent more than if you had just paid in cash.  The only way around this is if you pay off the card, but that surely isn’t what they want.  They want you to keep holding the debt because they will make so much more without you paying everything off.

Car dealers aren’t exempt from this either.  Some car dealers make offers to help them get cars off of their lot.  The longer that vehicle sits on that lot, the less money the car dealer makes.  So they are willing to “cut” a deal.  Don’t worry; they aren’t losing anything from their “deal”.  They may say that they will help you pay off your old car, but they aren’t helping you to pay it off, they are just rolling it into the new car loan, so now your new loan is actually two car notes in one.  Just remember, if you try to unload the car note on someone else, they probably won’t want to pay for your other car you don’t have anymore.