Debt Elimination and debt consolidation - Two close pals

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Credit Card Debt Consolidation Loan
Like any new age consumer you find using credit cards convenient and flashy. You always found it easy to buy today and pay tomorrow through your credit cards. It was easier when you were young and had little family responsibilities. Slowly and slowly your credit bills stared piling up and a couple of default payments have threatened your credit history. With increasing family responsibilities you ... Read debt consolidation article



Get out of Credit Card Debt Using Self Help Techniques
Running up credit card debt, it's so easy to do, especially since we are all trying to achieve the American Dream - a new chair for the living room, braces for the kids, a new outfit for Saturday night dates, eating out with friends, and driving our new SUV that guzzles the gas and increases the insurance bill. It all seems to have become a part of normal daily living. We pay the minimum due, watc... Read debt consolidation article



Debt Elimination and debt consolidation - Two close pals
Debt elimination has always been my goal. But on this day, when I received the bill for the sudden replacement of the clutch in my car, the VISA bill and word that my daughter needed orthodontics for her teeth, how was I ever going to realize my debt elimination goals?

Does that sound familiar? It's totally frustrating. It's very easy to log your spending and identify high interest credit cards to pay off, but what happens when there is still more month left when the money runs out?

In the case of our family, debt elimination was only possible when debt consolidation was achieved by drawing on home equity and refinancing the mortgage.

If we had not gone this route, trying to stay on top of huge debt payments is a slippery slope that can very quickly become serious financial stress.

Consider the fact that Americans are declaring bankruptcy at record rates. One in every 100 families is affected by a bankruptcy.

I was on this slope 10 years ago. One of the most insightful moments of the process was preparing a written log for the trustee of all of our spending for the 5 years leading up to bankruptcy.

Skip ahead many years later and I am again juggling too many payments and not enough money.

The problem is simple. Raising a family, repairing the house, feeding everyone, takes a lot of surplus money. Even when budgeted for. Sound familiar?

Our advisor mapped out a debt elimination plan that included debt consolidation by refinancing our home mortgage.

The numbers were amazing. With record low interest rates, we rolled in $40,000 of consumer debt into our mortgage. Our mortgage payment stayed virtually the same, and we reduced monthly cash flow going out the door to cover debt payments by $900 per month.

I couldn't believe it. Was that possible? It was and it allowed us to work on our debt elimination over a longer, more manageable length of time.

There are pros and cons of course. The big advantage here is that you are able to avoid bankruptcy. The danger is that with the pressure off, you will return to building up debt on your credit cards etc.

Some points to consider:

1. You reduce the number of physical payments you make per month from many to one (that's good)

2. You might be able to get a reduced interest rate by using your house as the collateral (reduced rate: that's good, but house as collateral: hmmm)

3. Typically your total monthly outlay will be lower (that's good)

4. You only have to deal with a single creditor (that's good)

5. You might get some tax breaks out of the deal (that's good)

6. Your credit cards are cleaned, meaning that your free to spend (not so good)

7. It'll take longer to pay off your debt (not so good)

8. You'll likely paying out more over the life of the loan; even though you're making a lower payment, you're paying off the loan over a much longer period of time (not good)

9. You can loose everything if you default on this loan, since it's a secured loan (definitely not good)

To ensure this plan doesn't stray off course, some helpful ideas may include closing your credit card accounts once they are paid out.

Building a spending plan and tracking money that is coming in and out is a great way to stay on top of the new cash picture. Computer accounting programs that automatically download transactions is extremely helpful.

In some cases, it is a great idea to get some help. For some people, the problem of overspending is a psychological one.

Spending can become a habit that's as difficult to kick as alcohol, drugs or gambling.

For our family, the key is not to return to our spending ways after debt elimination through debt consolidation takes some of the pressure off. That will be our focus.

Debt-eliminationsite.com is a one-stop-shop web portal for those facing debt issues. Multiple pages of resources, referrals and tools. Expert advice on credit cards, loans and bankruptcy.

Financial planning to get out of debt. http://www.debt-eliminationsite.com

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Credit card debt consolidation and management tips

Some people carry debt on their credit cards due to inability to make payment owing to some emergency expenditure, others carry debt due to excessive or irresponsible expenditure on their credit cards (forgetting that they need to pay it back too). Today, a lot of people carry multiple credit cards and carry debt on each of the cards. Whatever be the reason, everyone wants to get out of this debt.

Debt consolidation is probably the first and the best step in this direction.Credit card debt consolidation is a pretty popular concept now. Put simply, debt consolidation is the process of transferring your debt from multiple credit cards to one credit card.

It is also called transferring balance from multiple credit card accounts into a single account.Why would one go for debt consolidation? Well, there can be multiple reasons.You could decide to go for it just to prevent confusion in dealing with multiple credit card accounts.

However, the primary reason is lower APR on the credit account you are shifting your debt to. The APRs on different credit cards can be different. A lot of companies even try to lure new customers by offering a lower APR than their current credit companies when they transfer balance from their current card to the new card.

However, this is easier said than done. You need to read the fine print on such balance transfer offers, understand them completely and judge whether they would actually be beneficial to you. Among others, the following 2 set of questions are most important and need to be examined carefully before zeroing-in on a balance transfer offer:

1. Is there a fee associated with the balance transfer? If yes, then does it offset the benefit obtained in terms of reduced APR?

2. Is the lower APR applicable only for a limited initial period? If yes, then how long is this period? What is the long term APR and is it less than the current APR on your credit card? Will you be able to pay all your debt during this reduced APR period? Is the card going to be beneficial to you in the long term?

You might also want to explore other avenues of debt reduction before actually going for debt consolidation. Contacting a good debt assistance company might be easier and better for you since these companies generally have all the information about balance transfer offers and other debt reduction/elimination methods. However, do not use services of such a company unless you are absolutely sure about the quality of their services.

Declaring bankruptcy or a monthly-installment based personal loan are other possible means of eliminating debt. If you are not entirely sure about the best method, do not hesitate to take professional advice even if costs to a small fee. This fee might actually turn out less expensive in the long term as compared to the wrong option chosen by you all by yourself.

Rudy Hadisentosa: CCN.com is a free online credit cards review and application website. We offer credit cards selection from visa,master cards, discover, american express and many others. We have quite some categories and hundreds of credit cards selection to fit your need. Apply for a credit card at CCN.com.


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Debt Elimination and debt consolidation - Two close pals
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