If you’re struggling with making ends meet, you’re not alone. Most people experience financial hard times at least once in their lifetime. Whether you’re having difficulty paying your bills on time due to an unexpected layoff, personal illness or just plain overspending, the important thing is to take action. Do not let your credit debt go from bad to worse. The good news is that there are strategies and alternatives to prevent sinking further into debt.
Develop a Budget
First outline a realistic assessment of how much money you make each month along with how much money you spend. Make a list of all your sources of income and fixed expenses. Fixed expenses are those that you incur each month, such as auto, mortgage and student loan payments. Next, outline the expenses that vary each month, such as costs for clothing, food and entertainment.
When you outline all the ways you spend money, you can begin to prioritize and track your spending habits. It’s very likely that you can find ways to reduce the money you spend on entertainment and clothing. The goal is to focus on being able to pay for the necessary essentials. If you need help developing a budget, you’ll find that there are computer software programs and books that are useful for developing a budget and credit management.
Communicate with Creditors
If you’re struggling with making your car payments or mortgage payments on time, contact your creditors. These are secured debts, and creditors are able to repossess the car or foreclose on your home. Both are more costly in the long run and will have a negative impact on your credit score. However, if you contact your lenders and explain why you’re having difficulty making payments on time, you may be able to extend your payment period by suggesting a modified payment plan. If they believe that you are acting in good faith, they will be willing to change the terms or extend the repayment period. Some may even suspend the payments for a brief time.
Credit Counseling Organizations like Credit Guard can also assist you with money management advice. Certified counselors at these organizations will discuss your financial circumstances with you, and create a personalized plan to help solve financial issues. They will give you sound advice on how to manage debts and money, develop a budget for you, and offer free workshops and educational materials. When you meet with your financial advisor, your first session will last about an hour.
Debt Consolidation Plans
If following a strict budget doesn’t alleviate your financial stresses; your financial counselor may advise signing up for a debt management program. It may be necessary to do this if you are not able to meet your financial obligations to avoid filing for bankruptcy.
After you have enrolled in a debt consolidation plan, your financial counselor will act as a third party on your behalf, and contact your creditors. Your counselor will negotiate terms to lower your interest rates, settle late fees, and agree on an affordable monthly payment plan. With just one payment to the financial organization, your money will be disbursed to your creditors, and the anxiety and stress caused from credit card debt will be lifted.
Almost half of all Americans are living beyond their means and spending more than they earn, thanks to credit cards that make overspending simple. As the economy has taken a tumble in recent years, many consumers turned to credit as a way of making ends meet. As a result, many of those men and women find themselves facing substantial debts, with monthly payment requirements that can be nearly impossible to keep up with.
If you find yourself in debt, there are a few steps you should take right now to minimize the damage that high amounts of debt can do to your budget, your retirement savings, your credit and even your morale. Here’s an action list of the most important steps to take today:
Know Your Limits
Each year, banks earn tens of millions of dollars in overdraft fees – those fees you’re charged when you overdraw your checking account. Even more money is lost through over-limit fees when consumers exceed the upper limits of their credit cards. The average overdraft fee is just under $40; that’s a pretty big bite. Avoid overdraft and over-limit fees by knowing your balances at all times. Use mobile apps, websites or just a simple pen-and-paper list to track all your charges and checks to ensure you don’t rack up these fees.
Know The Fees
In addition to overdraft fees, many checking accounts have account fees that kick in when your balance dips below a certain level; some banks have fees no matter what amount you have on deposit. If your bank charges you fees to handle your money, take some time to shop around for better options. Look in your neighborhood as well as online to find a bank that offers a no-fee or low-fee option to prevent these recurring costs from adding up. A credit guard debt management program can educate you on what to look for. Even if you have a “free” account, some accounts have requirements for waiving fees, like the minimum monthly balance mentioned or a limit on the amount of monthly transactions. Some accounts require direct deposits to avoid fees.
Cut Transaction Fees
If you use your ATM a lot for withdrawals or deposits, you might be hit twice with fees – once from your bank and once from the ATM machine itself. Seek out fee-free machines, or make deposits in-person and keep a portion of your check as cash.
Avoid Cash Advances
Most credit card companies charge 3 percent or more on every cash advance you take, and advances are also typically associated with a substantially higher interest rate than other types of charges. Tracking your spending and making a budget or spending plan can help avoid the need for costly cash advances.
Enroll In a Debt Management Program
Arrange to have your credit counseling representative negotiate with your creditors for lower interest rates, and set up a once-monthly payment plan for all your bills to drastically cut debt in the fastest time possible. Credit counseling will also help you identify other ways you can cut spending and spend smarter.
Debt may feel like a lifelong problem, but it doesn’t have to be. Being proactive and seeking solutions is the best way to conquer debt and have a happier life.
If you have debt, you may also have an unreasonable fear of ringing telephones. It’s easy to understand why: Most men and women facing debt have had at least one less-than-courteous phone call from debt collectors and collection agencies trying their darnedest to get into your nearly empty bank account and extract a little of your hard-earned cash. While many of these collectors are trained to be aggressive and to use tactics that intimidate us into actions we may not be able to make, the fact is that many of the techniques they use are actually illegal and can land them and the companies they work for in serious legal trouble.
Most consumers facing debt are already hampered by feelings of guilt and isolation; understanding the laws that protect you is a powerful way to make sure you don’t fall prey to illegal collection tactics. Here’s a quick guide to the protections afforded by the Fair Debt Collection Practices Act (FDCPA), which was designed to help consumers avoid being victims of unfair and illegal collection practices:
• FDCPA applies to personal debt, including credit card debt, medical bills, auto loans and other personal and family debt; it does not apply to debts associated with running a business.
• Collectors may only call during normal waking hours, typically between 8 a.m. and 9 p.m., and they cannot call you at work if you tell them – orally or in writing – not to.
• While collectors may contact your family or acquaintances to learn your address or other contact information, they’re prohibited from discussing your debt with them.
• You can stop collectors from contacting you by writing a letter telling them not to; they still have the right to contact you if they decide to pursue legal action. Send the letter with a return receipt requested, so you have a record that it was received. Of course, this does not erase the debt.
• You have the right to receive a validation letter telling you the amount of the debt, the name of the creditor and instructions on how to dispute the debt if you think it’s incorrect. The debt collection letter must be received within five days of the collection agency first contacting you.
• Collectors are prohibited from using harassment and abuse; for instance, they can’t use threats or obscenities, and they may not make false statements, such as claims that you’ve committed a crime, that they are attorneys or government employees, or that they work for a credit bureau or reporting agency. They also can’t threaten you with arrest or threaten legal action they do not intend to take.
Of course, the best way to pay back debt and stop annoying letters or phone calls is to enroll in a debt consolidation program. Debt consolidation provides you with support and emotional relief from your financial burden, and debt counselors will work with your lenders to decrease interest rates and fees, so you can pay your debt a lot faster. They can also simplify the repayment process by combining debts into a single payment that you make monthly. Taking the time to know your rights and taking the necessary steps to start eliminating your debts are the first steps toward a stress-free, confident life, so get started today.
Credit card debt is endemic in America today, and there are very few men and women who can say they’ve never faced a mini-debt crisis of their own. The temptation of easy money can be a hard thing to pass up, and because credit is so easy to get, it’s also easy to get into debt before you know it.
It’s not that credit in and of itself is bad; in fact, used wisely, credit can be good. Without credit, only the wealthiest people could afford a home, and a lot of people wouldn’t be able to buy a new car. Without student loans, many people would never be able to achieve their dream of a college education. No, it’s not credit that’s bad – it’s the misuse and abuse of credit that consumers have to guard against. Sadly, because it’s so easy to get a credit card or personal loan – at least while your credit is still relatively strong – it’s also very, very easy to find yourself in more debt than you can comfortably pay back.
It doesn’t help that every day, consumers are assaulted with commercials and ads telling them what they should buy and how much better their lives would be if only they spent their money on this new item. Marketers are smart, and they spend their days figuring out the best way to motivate people to spend their money.
Of course, pointing fingers at advertisers and companies isn’t going to get you out of debt any faster. For that, you need to look at a different kind of motivation, one that’s working for your benefit, and there’s no better place to turn to than a credit management and debt consolidation program.
Credit management programs and debt management counselors can work with your creditors to help lower interest rates and monthly payments, making it easier for you to pay your debt down faster. They can also work to roll all of your outstanding unsecured debts into a single amount with one monthly payment; that’s a lot more convenient than making lots of payments during a single month. It also prevents you from thinking about your debts over and over again during the month.
Just as importantly, the counselors who work with debt management programs will help you develop the good habits you need to keep from sliding back down that slippery slope into debt. Credit counselors can help you identify the behaviors that cause you to use credit or overspend in general, and they’ll work with you to create a plan of action to start leading the financially healthy life you wish you were living right now.
The sad fact is, most men and women have never had the kind of financial management guidance and education they need to take the steps that will help ensure a healthy financial future. For many of us, our first experience with credit was when we began receiving unsolicited offers from credit card companies.
Fortunately, credit management companies can put an end to all that and set you on a clear path towards a life of debt-free financial stability. Contacting a credit management company today will help you take that all-important first step to a better future.
Even if you are not in as much debt as others, you could benefit from credit counseling services. Anyone that uses credit cards can benefit from the services provided by these companies.
Benefits of Credit Counseling Services
There are many benefits to using the services of a credit counselor. Some of the benefits that a counselor can provide are:
- Money management skills
- Help with eliminating debt
- Emotional support during debt reduction
- Eliminating collection calls
- Debt consolidation
Many people confuse debt consolidation with more loans. However, this is not the case. A debt consolidation service thinks and operates on the idea that getting out of debt should not make you first get into more debt.
So what is a consolidation? Your debt counselor works directly with your creditors to lower your monthly interest rate. You then pay them a pre-set amount of money each month. They take your payment and disburse it to your creditors based on the arrangements they have made.
Why Does it Work?
You may think such a simple plan won’t work, yet the reasoning behind debt consolidation is solid and time-tested. What many cardholders don’t realize is that it is usually not the principle of the debt that is hurting them so bad. The high interest rates and other types of fees are what cause your card balance to soar.
A Credit Guard debt consolidation will not reduce the actual principal amount you charged. However, it will lower the interest you are required to pay, and can often get rid of some fees that you were charged as well. You will be very surprised to see at how much your monthly payment drops when your interest rate falls by 5 percent or more.
Who Should Use These Services?
Anyone can use debt consolidation services, even if they are not head over heels in debt. It’s a great way to reduce your interest rate without having to transfer balances or take out another type of loan. If you have any credit card debt at all and are interesting in lowering your monthly payments, you should consider using credit counseling services.
Technology has helped our world in many ways. For instance, millions of Americans have been able to work from home via the Internet, giving them more flexibility. Yet, more people than ever before are also seeking credit and debt counseling. While there are many factors influencing this, one factor is the advent of online shopping.
It’s too Easy
In the old days, you had to get in your vehicle and drive to a store in order to buy anything. If you lived in a rural area, you may have had to drive many miles just to go grocery shopping. Nowadays, you can just hop online and access your favorite stores. There are even several stores that don’t exist anywhere but online. It has simply become too easy to shop online anytime of the day or night.
It’s Often a Good Deal
Many people justify their Internet purchases because they are getting items at a better deal than if they would have bought them in the stores. A lot of people do save money by shopping online. But remember, if you buy something that you weren’t planning on buying simply because it’s a good deal, then you aren’t saving a single penny. You’re spending more, and it will take longer to succeed in paying off credit card debt.
Before, you might have had to plan a shopping trip, especially if you lived in a rural area. You would need to save your money, find a babysitter, and then drive 40-50 miles to the nearest shopping center. You may have had to wait for a couple weeks before everything would work out for you to go. Now, order online and have it in your hands in a couple days. For rural Americans, it’s become a much faster way to shop.
As with many good inventions, there is a downfall to online shopping. Most consumers use their credit cards instead of a debit card, and suddenly find themselves deep in debt. If this sounds like you, don’t despair. You are not the first person to do this and will not be the last. Seek out credit and debt counseling and you will be able to regain your former firm financial footing.
Are you a candidate for non profit credit counseling? What exactly is it and how can it help you? Read on to find the answers to your most pressing questions.
What is Non Profit Credit Counseling?
To determine if this is the route you should take to get out of debt, you should first know exactly what it is. A company that offers non profit credit counseling basically agrees to educate you about your financial situation and come up with a solution. They do not receive a profit for their services. A counseling session is usually offered at low or no cost or obligation. Once you have discussed your financial situation with a debt counselor, you can decide which path you want to take.
How Does Credit Counseling Help You?
Everyone is not born with good money management skills. Your thoughts and ideas about money and how to manage it are directly related to how your parents and other influences handled theirs. You may have decided to do things exactly as they did, or exactly opposite. If you were not taught how to manage your money effectively, debt counseling can teach you budgeting and other money skills so you can manage the money you have. If you are in debt and need help, they will come up with solutions for you such as a comprehensive debt consolidation plan.
Are You a Good Candidate for Credit Counseling?
Consider these three questions to determine if you would benefit from credit counseling.
- Do you feel like you need help developing a budget?
- Do you have debt that you need to pay off?
- Would you like to feel in control of your financial situation?
If you answered yes to one or more of these questions, a non profit counseling service will benefit you. The great thing is, most non profits do not charge you a dime for the initial consultation. It’s not going to hurt you, and it could very well help you, so find a debt counselor today.
Underemployment and a struggling economy have made it tough for some students to repay their college loans. Underemployed or unemployed students may have additional options available to them if they’re struggling with mounting debt. Students can take advantage of certain programs to reduce personal student loan debt.
Charge-offs Increase, Students Unable to Repay Loans
Equifax reported recently there are more than 123 million outstanding student loans. The report also showed that the number of unrecoverable student loan debt increased more than 36 percent for months January and February from the previous year. For many students, this is the time of year when the debts enter into collection.
Volunteer Service and Lowering Student Loan Debt
Before a student loan starts to impact the person’s credit, steps can be taken to get the debt under control. There are volunteer programs and service job opportunities that can really reduce the overall amount of the loan. Professionals who are willing to take positions serving in certain types of communities and programs can have the student loan amount reduced.
Some of the most popular options are:
- Students with a Perkins loan can teach at a disadvantaged school in their district and get a portion of the loan forgiven.
- Volunteering with Americorps, Peace Corps or Volunteers in Service to America also offer student loan forgiveness as a perk.
- Health professionals can receive up to $50,000 for their loans by volunteering at clinics where there are work shortages.
Debt Consolidation Help and Loan Debt
There is no shortage of student loan management opportunities for recent graduates who are willing to commit to several years of service. Many of these opportunities are extended to professionals from all academic backgrounds. In addition to considering a service option, one can consider a debt consolidation help plan. Counselors offering debt consolidation help work closely with creditors to create a flexible repayment and debt management strategy that fits into the person’s budget.
Maintaining a healthy debt-to-income ratio and a good payment history builds credit. A good credit score can affect a person’s employment prospects and influence the person’s ability to obtain financing for cars, homes, and even new businesses. Although student loan debt is often one of the greatest challenges a recent graduate must face, debt consolidation help and credit counseling can help the student become debt-free.