Debt Management - Making the right choice

[ Bookmark this page! ] [ get HTML Version ]

Debt Consolidation Explained
Times are hard for many Americans, with interest rates going up, sky high gas prices, and overall inflation, so it's not surprising that many families find themselves in financial difficulty that's frightening enough to cause them to seek professional help.

When faced with mounting financial obligations, it's easy to fall prey to any number of the advertisements you see on television, i... Read debt consolidation article



Debt problems - How to get interest on your debts frozen
The first thing to understand is that there is categorically no guaranteed way to get interest frozen. Each of your creditors has the right to refuse any change in the details you initially agreed. Therefore, all you can do is ask. Given that this is the case, it follows that your success depends entirely on what and how you ask. It will also be considerably influenced by how... Read debt consolidation article



Debt Management - Making the right choice
Debt Management plans offer credit counseling clients a different and new approach to tackle their finances. Finding out if a debt management plan is right for you can take some time. However looking into the pros and cons now will help you know if entering into a debt management plan is right for you.

Pros

Consolidated Monthly Payment - Debt Management Plans consist of one monthly payment of an individual's credit card debt and other unsecured debt. Instead of several payments that are sent out monthly the credit counseling agency will receive your monthly payment and break it down to individual payments to all of your creditors.

Reduced Interest Rates - Although some creditors have tightened what they will as far as an interest rate reduction for a client who is working with a debt management plan there are still some credit card companies that will reduce rates as far as charging no interest while on the debt management plan. However that is not the norm so it is reasonable to expect a slight decrease in interest rates and if you receive a larger break in rates that is more of a benefit to you.

Reduced Monthly Payments - The days of a creditor reducing the monthly payment by half or more seem to be over, however several creditors reduce payments required by several percentage points for a customer of theirs that is enrolled into a debt management plan. This can help free up money to apply elsewhere such as a savings account or a retirement account.

Stopped Late & Over Limit Fees - This is probably the most beneficial portion of the debt management plan for a credit counseling client who is behind with their payments to their creditors. The average late or over limit fee is about $29 so if you combine that with an average of six credit card accounts the savings on the fees alone could be up to $174 dollars for that example.

Customer Service - Often overlooked by a person researching a debt management plan that is appropriate for them, customer service means that all of your credit card accounts should be accessible by the credit counseling agency you are working with and any questions you have regarding those accounts should be answered in a timely fashion. A well rounded customer service staff will go a long way as far as assisting you to get out of debt.

Con -

Accounts Closed - All of your credit card accounts are closed to further charging. This can be initially looked at as a con by the consumer because it takes away their ability to charge, however in the long run this portion of the debt management plan should be viewed as a pro because it allows the client to rely more upon the income they are bringing in and will result in less overall debt that is accumulated while on the debt management program.

Debt management programs offer an array of help with little to consider as negative. The service is designed to assist anyone in need from freeing themselves of the burden of debt. One important factor is that a debt management plan has no negative impact on your credit score. This is according to Fair, Isaac the nation's credit scoring system, also known as the FICO Score.

These are a few points to consider in determining if a debt management plan is the best option for you. Contact an agency to determine if their plan can meet your needs.

Rick Munster is the Media Planner for Debt Reduction Services, http://www.debtreductionservices.com. He resides in Boise, ID. When he is not busy working with the media for his company, he enjoys writing, hiking and finding a good place to drop a line and do a little fishing.

What do you want to do?
Bookmark this page before you lose it
Search this site for FREE information
Help spread the word. E-mail this page to a friend

How to quickly get out of debt

Debt is becoming number one problem in the United States Today. The average American family has at least $8,000 in credit card debt and most college students who just graduate from college have $3,000 to $5,000 credit card debt in their first year after college.

I love what the founder of the wisdom center Dr. Mike Murdock says about debt, he says that "Bad debt is a sign of lack of financial wisdom." If we don't know what to do with our money, we tend to spend it on something that will lose values in times. Robert Kiyosaki calls the things that will lose value "Doo Dads" Doo Dads can be a luxury car, a boat, jewelry, expensive clothes and so on.

Most people are never taught financial knowledge by their family or when they are in school. So as soon as they get out of school, they go crazy, because a lot of banks are offering them credit cards as soon as they finish their college education. They start buying things now and pay later. What they don't realize is that credit cards' interest is very high! It can be 18 to 29%. If you make late payment and go off allowed limit, the penalty period interest rate is extremely high!

It will take 20 years to pay off $1000 credit card debt if you only make the minimum payment every month. So be careful and watch out before you decide to buy something. Be careful of the words "Easy low monthly payment." They are very deceiving. When you get into debt, you will have to pay the interest if you can't make the payment in full.

Why the problem is getting worse? Most people rather spend their money on watching movies, eating out and buying clothes rather than buying books, tapes and videos that will teach them financial knowledge. They are not concern about their financial well being. Remember this, "What you don't respect, it will flee away from you." If you don't respect your financial life, you will find yourself deep down in poverty. Financial blessing will flee away from you if you don't respect it.

Most people who are deeply in debt do not want anybody to know that they are in debt. They are scared when their friends tell them that they have been spending too much. They get offended when someone tells them to get help or to buy books, tapes or go to a financial seminar that can give them financial knowledge and information, so they can learn to dig themselves out of their debt. They never consult and discuss their financial problem with a qualified financial planner or mentor.

What do I do now? Well delay of gratification is one of the solutions; don't buy it if you don't have the money to buy it! Wait, wait, and wait! I know it is very hard to fight on your emotion. You want the things you want today instead of tomorrow, but discipline yourself when it comes to buying.

It doesn't make any sense to buy a coffee table that cost $200 on credit and in 1 year you have to pay the bank $800 for the coffee table because of the interest that comes from the credit card. You can't even sell the table for $200 anymore! Be smart; use your mind before you buy, not your emotion, because our emotion can deceive us. Think, think and think, before you purchase something. Pay it cash if you really want it. Don't trade your future for today's gratification.

Get financial education! Get it now and don't delay it. You can always earn your money back, but you will never be able to earn your time back. The longer you delay the process of learning, the deeper you will get into debt and financial trouble. One of best financial education tool that is available today is "Choose to Be Rich Series" by Robert Kiyosaki. There 12 tapes or CDs and one video that talk about how to become financially literate.

It cost $150 to $200, but its well worth it. If some people are willing to pay $20,000/year to go to college, why can't they spend $200 on financial knowledge that will teach them to be smart financially for life! Don't be stingy to yourself when it comes improving your knowledge and education. If your gas tank for your car is worth $60 to refill it, your brain is worth more than $60.

Run a financial statement! You must know how deeply in debt you are! I love the depth indicator in every swimming pool. It tells me how deep the pool is, so I know what to expect. If you're not a good swimmer, you'd better stay in the pool that is not too deep, but as you become a better swimmer, you will be able to move to a deeper pool level.

Many people drown because they don't pay attention on the depth indicator in a swimming pool. It can be very fatal when someone doesn't know how deep the pool is. The same thing can happen if you don't know how deeply in debt you are.

You must know how deep your debt is! I am surprised that most people I talk to never look at their bank and credit card statements and they are not sure how much money they owed to the bank! When I ask them, how much do you owe the bank, they told me that they are not sure, or they are too scared to see their financial statement, but they are making their monthly payment and they don't even know the interest rate of their credit card!

Write it on a piece of paper, get the total balance you owed, so you know how to set a goal in paying off your debt. Remember this; you can't hit a target that doesn't exist! You must write it down on a piece of paper, or even a computer software programs like Microsoft Money or Quicken that will help you to keep track all of your expenses.

One thing that I found very useful is having a PDA (personal digital assistant) or Pocket PC to keep in track your expenses. A PDA or Pocket PC can help you balance your bank accounts, credit card accounts and manage your expenses.

Look everybody makes mistakes, it's human but we can't make the same mistakes over and over again! We have to learn from our mistakes and learn from them. The difference between the have and the have not is the amount of proper applied information that they have.

© Copyright 2005 http://www.pebden.com, Author: Entjik Jeffrie, All Rights Reserved.


Top rated articles for debt consolidation

1. Debt consolidation loans - Advantages and disadvantages
If you have multiple high interest credit cards and other financial obligations, debt consolidation or some other debt management strategy may be in order. As you are by now aware, with a debt picture... Read debt consolidation article

2. Repair Your Bad Credit and Personal Loan Record Starting With Your Credit Card Debt
Credit card debt is easy to ignore. You make the monthly minimum payment on your credit card debt and you just keep charging. Have you thought about the fact that you are spending your retirement mone... Read debt consolidation article

3. How to avoid a credit card debt nightmare
Are your credit card debts giving you nightmares? If yes read on and see if we can save you some money and help you sleep better at night. It is so easy to get yourself into debt, as all these credit ... Read debt consolidation article

4. Debt consolidation and Credit Repair - All is up to you
Log onto to a search engine such as google.com and type in the term credit repair. It's likely that Google will return more than 25 pages of listings, many of which will be companies claiming they can... Read debt consolidation article

5. Free debt consolidation
Chances are, when you're reading this article, you've typed this particular set of keywords in the search box: free debt consolidation. And without a doubt, a number of articles came out as a result, ... Read debt consolidation article

6. Debt Management Help
Money is available at an all time low interest rates in market. Easy credit is luring people to take money from creditors these days. In some cases people are unable to make repayments. For people who... Read debt consolidation article

7. Debt Consolidation Loan - Start Afresh
You payments are mounting. You don't know what you can do to pay off those mounting bills. Also, excessive spending and cumbersome financial responsibilities are slowly taking you to bankruptcy.
... Read debt consolidation article

8. Money or financial problems - How to prepare a budget
You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming... Read debt consolidation article

9. Debt and Bill Consolidation - No Credit Check
Debt consolidation has several advantages. For the most part, many consumers are unable to eliminate their debts. High finance charges and late fees keep many people in the hole. Fortunately, there is... Read debt consolidation article

10. Good Debt Consolidation Program
There are a large number of people who are under the stress of enormous debt, which is magnified by the pressure from collection agencies and the firms with which they have their debt. If you are one ... Read debt consolidation article

1. Online Debt Consolidation Application
2. How You Can Avoid Credit Card Debt
3. Choosing the best debt management services
4. Is debt consolidation for you
5. Debt Management Service
6. Debt Consolidation Loans and Info
7. Finding the best debt reduction service
8. Bill Consolidation Loan
9. How to Pay off Credit Card Debt
10. Correcting your debt problem and dealing with finances

Debt consolidation, debt counseling and debt management in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,



Debt Management - Making the right choice
Debt consolidation, debt counseling and debt management services in Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Debt management, debt counseling and debt consolidation in Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin and Wyoming.