Growing Debt Problem

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Debt Help - Using Online Debt Consolidation Services
Choosing to eliminate your consumer debt is the best financial decision you can make. Having excessive debt is the cause for much worry and stress. In order to free themselves from this huge burden, many consumers acquire debt consolidation loans. Unfortunately, getting a loan to consolidate debt requires a good credit rating, homeownership, or collateral. If you do not meet the criteria for obtai... Read debt consolidation article



Consolidate Credit Card Debt
There is no quick way to reduce credit card debts. Nonetheless, those who outline a realistic strategy for reducing debts, and stick to this plan, will gradually reduce their credit card balances.

Consumers have several options for paying off credit card debts. However, this does not involve the balance miraculously disappearing. In most cases, consumers simply move the money and pay th... Read debt consolidation article



Growing Debt Problem
An estimated 3m people owe more than £10,000 on credit cards, overdrafts and loans, new research shows.

Among these people just over 2.5m have unsecured debts of more than £50,000, according to debt solutions company One Advice.

The research found that one in 10 people who owe five figure sums are worried about whether they will be able to repay their debt.

A fifth of people also admitted they had months where they found it difficult to meet their repayments, and 3% said they had problems affording repayments most months.

In 16% of cases people said they were planning to take action to address their financial problems, with 7% claiming they were considering going bankrupt.

London has the highest proportion of people with large unsecured debts, with 9% of the population owing more than £10,000, followed by the North and Yorkshire at 8%.

People in the Midlands were least likely to have big debts, with just 4% of the population owing more than £10,000.

Debt advisors are already braced for a surge in pleas for help when people realise the scale of their problems after Christmas.

Those worrying about their finances should seek professional advice, as taking out the wrong debt solution could make matters worse.

New Bankruptcy Rules have come into force which may enable people with severe debt problems to become debt free much quicker than previously. Bankruptcy may be a better solution than debt management, an IVA or Trust Deed

Indeed, bankruptcy can sometimes appear to be the easy way out for people with serious financial problems. But there are difficulties associated with this that can remain for some time.

Bankruptcy stays on your credit file for six years which can affect your ability to get a mortgage and credit.

An alternative to bankruptcy could be an Individual Voluntary Arrangement (IVA) (or a Trust Deed for Scottish residents). With these solutions you pay back an affordable amount over a fixed period (normally 5 years for an IVA or 3 for a Trust Deed). After this time the remainder of your debt is written-off. During this time no interest is charged on your accounts and all creditor action is suspended. If you have equity in your home you are normally expected to release this by way of a remortgage or secured loan. These solutions may not be available if you have too much equity (because your lenders would then quite rightly expect you to use this to pay your debts) or if your debts are mainly with 1 creditor (because this creditor may choose to vote against the process).

Other solutions available include getting a debt consolidation loan or remortgage. These can help reduce your monthly outgoings but can lead to your overall payments over the term of the loan increasing. You may also be converting unsecured debt to debts secured on your home. A consolidation loan can help save money if the interest rate on the new loan is lower than the interest being charged on your existing debts (especially if these are store cards or credit cards).

A short-term solution may be to transfer credit card balances to other credit cards that offer an interest free period or cash-back.

A less formal route than an IVA is s debt management plan. These can enable you to reduce your monthly outgoings to a more affordable level. A 3rd Party negotiates with your creditors to accept reduced payments and where possible to accept freeze interest / charges. Debt Management plans and advice are offered by Charities including CCCS, Citizens Advice Bureau and PayPlan and from a number of commercial companies including Harrington Brooks, AllClear Finance, Baines & Earnst and Gregory Pennington.

Your creditors may also accept a repayment proposal if you contact them direct.

The key to solving your debt problems is not to bury your head in the sand. Don't ignore calls and letters from your creditors and if you are unable to cope seek help.

Miles Grady BA (Econ) Hons ACA Director

Debt Consolidation

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The Best Balance Transfer Credit Cards

Have you read your credit card statement lately? Do you know what your annual percentage rate is? How about your annual fee? You may be surprised to learn that your current card is not the bargain you once thought it was. If you are tired of paying fees and big monthly payments then shopping for a new credit card is a must. Some balance transfer cards are better than others; here are some things for you to look for with your new card:

Low Introductory Rate - If you are paying a high interest rate for your current card you can save yourself plenty of money by shopping for a card with a low introductory rate. Yes, there are still many balance transfer cards available that will give to you a rate as low as 0% for twelve months. By obtaining one of these cards you could save yourself hundreds of dollars per month and pay off your outstanding balance faster.

Transfer Fees - Balance transfer credit cards may charge you a small fee to make a transfer. Still, there are some cards that charge no fee on the initial balance transfer upon applying. It may be to your advantage to pay the transfer fee especially if you are going from a high annual percentage rate card to a low percentage rate card. Crunch some numbers to find out which card works best for you.

Save on Annual Fees - To secure your business, many balance transfer credit card issuers such as Chase and Citibank charge no annual fee. This can be a nice alternative for you especially if you have been paying $35, $50, $85, or more for your current card annually.

Get Rewards - A nice option for many consumers are those balance transfer credit cards that reward you for using that card. Depending on the plan, you can quickly accumulate airline miles, hotel stay credits, take a cruise, rent a car, accumulate points toward receiving free gifts, and more. Some cards, such as the Citi Diamond Preferred Rewards Card, will even give to you bonus points upon your first purchase of any amount!

Get Rebates - Like a typical reward card certain balance transfer credit cards will give to you cash rebates toward the purchase of a new or used car or toward repairs on your current car. The Citi Drivers Edge Platinum Select MasterCard is an example of one such card making this offer.

Perhaps the best thing for you today is that choosing a new credit card is to your advantage. Never before have terms, fees, and benefits been this good. There is no telling how long any offer will last, but if you act now you can obtain a balance transfer card that works best for you. To find your next card, searching online makes comparing all of the best credit card offers a breeze.

Copyright 2006 Ed Vegliante. Free online reprints of this article are allowed provided the resource box remains intact with a live link back to Credit Card Surplus

Ed Vegliante runs the website http://www.Credit-Card-Surplus.com , a well organized credit card directory enabling the consumer to compare and apply for a variety of credit card offers including Balance Transfer Credit Cards . View more Credit Card Articles.


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Growing Debt Problem
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