How to get rid of credit card debt

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Student Loan Debt Resolution and Debt Settlements
Settlements are the option considered by students who find it very difficult to repay the loans taken by them for their education. Settlements involve an intermediate agency that negotiates with the lender to provide the student borrower an ease in repayment.

Settlement agencies charge some fees upfront when one enrolls for their settlement program. Once a student is enrolled, the settl... Read debt consolidation article



Debt management secrets
Debt management is a topic most people will have to deal with at some point. Debt is acquired by not living within your means. Living within your means is simply that you do not spend more than you make. Debt management is controling and managing debt responsibly. To reduce or eliminate debt and create a cash flow that keeps you out of debt is debt management. To completely control your debt you n... Read debt consolidation article



How to get rid of credit card debt
The statistics are truly mind numbing and continue to get worse each and every year. At the current rate about 1% or one in a hundred families will be forced to declare bankruptcy at some point and over 90% of Americans' disposable income is spent paying back debts.

Not a happy picture but as bleak as that sounds running won't change it but knowledge may and so, let's take a quick snapshot at a few of the current credit card debt statistics facing so many Americans today.

The American Consumer spends over 1 trillion (that's a 1 with 12 zeros) per year on credit card purchases. Not a big deal in and of itself but the problem lies in that they end up carrying over and paying interest on about half that amount or $500 billion. This translates into a balance of between $5,000 and $8,000 per family, with about $1,000 per year going just to pay the interest.

That's just the average - many people owe much, much more!

Excessive Debt Costs Everyone Money Many American receive at least one new credit card offer in the mail every day. The money being spent to service the debt industry is truly immense. Billions are spent administering, calculating and marketing the various aspects of the credit card industry.

Few industries or people escape unscathed, at least in the long run by debt. The burden that bankruptcy puts on the court system or the cost to government of providing subsidized debt counseling, are just a few examples of how debt effects the nation. In addition, consumers with excessive debt have less to spend and when money isn't flowing, it hurts the economy.

Whatever Happened to Saving? Debt is becoming increasingly more common. Not long ago, even a little debt was considered to be absolutely unacceptable. When you wanted something, you saved up for it and bought it ONLY after you had enough money to actually pay for it. And, if you had less than perfect credit, you couldn't even get a credit card. Look at consumer debt figures as little as 50 years ago and they were absurdly low - the way most of the non-Western world is today.

The reasons are many and everyone has an opinion but regardless of the reasons, the art of saving, at least in the "western world" seems to have been lost. Outside of a 401K or similar vehicle offered at your place of employment, virtually nobody is saving enough for retirement. Banks are starting to have to offer ever-higher interest rates to get people to put money anywhere near a savings account. In fact, few people even have a savings account anymore. Most people have a checking account and that's it. Our society and progressed into a "now" culture and the virtues of patience that help grow this country seem to have been lost. Whatever it takes to live life in the present with little regard for the future, appears to be the prevailing sentiment.

Is Over Spending the Culprit? Ok, I've been a bit harsh up until now but I don't want to give the impression that the only reason you're in debt is because you continuously and frivolously overspend. Other factors are involved.

Truth be told, many people get buried in debt because of the loss of a job or an illness and they use credit cards to pay for basic expenses. As a result, they fall into the downward interest trap spiral as their debt grows out of control from just a few thousand dollars initially borrowed to pay for essentials.

Most people do have a reasonable sense of what they can afford and they don't just go out and use credit cards to buy any and everything. Getting heavily into debt is usually a combination of many factors but the problem lies in people leaving balances on their credit cards for too long and not realizing just how deadly compounding interest really is to their financial well-being.

Amber Knutson is a contributing writer to: Eliminate Credit Card Debt and Debt Consolidation and Managing Debt. This article may be reproduced only in its entirety.

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Debt negotiation

If you're in a really bad situation, and you just can't even make your minimum payments this month, don't worry. You can negotiate your debts, and pay back much less than you owe - as long as they get their debt plus interest in the end, no-one is expecting you to pay the full amount when you just can't afford to.

If you've experienced some personal financial setbacks, and you now find yourself with more financial obligations than you can handle, you may be able to get the debt relief that you need...quietly and discreetly, and without filing bankruptcy. Believe it or not, nearly every financial institution will agree to settle outstanding debts for less than what is owed if you can demonstrate a legitimate financial hardship. If you are deep in debt and currently having a difficult time meeting your financial obligations, its time to take action before bankruptcy is your only remaining alternative.

Settling your debts takes a lot of time, and many people find it intimidating. If you do it right, though, you'll be surprised at how kind your creditors (that is, the people you owe money to) can be.

Close My Account

It might feel bad, but if you can't afford to pay that credit card, you'll have to close the account - that means you can't borrow any more money with that card. To close the account, you'll have to negotiate something called a 'payment plan'.

A payment plan turns your credit card debt into a plain old loan. The company might take as much as 50% off the amount that you need to pay back. It might seem strange, but they're happy you're paying at all - there are plenty of people who just don't pay and have to be chased, costing their creditors time and money. They'd rather hear from you if you're having trouble, so don't bury your head in the sand.

It's in your creditors' best interest to take whatever you can offer them, within reason. Their alternatives are lengthy court proceedings, or paying collection agencies to come round and intimidate you. They know that your offer will probably be the only offer you make before you do something more extreme that could result in them never getting any money back.

Do It in a Letter

Phoning companies to ask to negotiate your debts isn't a good idea - it's too easy to get flustered and say the wrong thing. They're professional negotiators, and you're not. You need the advantage of having time to think, which is why you should always negotiate with them by post. Getting it in writing also means that you can hold them to what they say later on. Here's a sample letter:

"Dear Sir or Madam,

I regret to inform you that I can no longer afford to make my minimum payments of $100 per month on my credit card account with you (account number 111-222-333). I would like to request the closure of my account, followed by the settlement of the debt on a monthly payment plan. Please advise what kind of terms I could expect from such a plan.

Yours faithfully..."

The Damage to Your Credit Report

You will rarely be able to negotiate over your debts without doing some damage to your credit report. If you're willing to pay a bigger percentage of the debt, though, you might be able to persuade the creditor to say that it was paid off to their satisfaction, instead of recording that they accepted less than they wanted. It's up to you just how much you feel your credit report is worth - if you're planning on getting a big loan anytime soon, this could be something to consider.

Original Source: Articles-Galore.com


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How to get rid of credit card debt
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