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Credit Card Debt Help

Credit Card Debt Help

by Bob Kish

A charging penalty in basketball could cost you a bucket. In the world of credit card debt, however, charging penalties could cost you buckets of cash over the long term. As a result, paying close attention to how you use your credit cards is essential to successful financial management.

By definition, credit cards are a device used to obtain consumer credit at the time of purchase. In and of themselves they are neither good nor bad. How you choose to use them is up to you. Make the right choices and they become powerful tools of freedom and flexibility offering you rewards while building your credit. Get carried away with credit cards and you may find yourself being suffocated under a mountain of debt. In the end, the choice is always yours.

Many people do not understand what good credit means and how the choices they make will affect their future – both positively and negatively.

Good credit is one measure of how trustworthy you are. As far as paying your bills on time this makes you a good credit risk because lenders trust that you will pay your loan back with interest on time.

Having good credit has many benefits such as lower interest rates, higher credit limits, ease when trying to borrow money, etc. In fact, many insurance companies and even employers are starting to pull credit checks on individuals prior to granting insurance or offering jobs.

If the credit bureaus indicate that you are behind on credit card payments or that you have a lot of outstanding debt or late charges, you may lose out on a variety of opportunities only available to those with good credit.

Bad credit, once established, can take a lot longer to repair than it did to create. For example, once you have derogatory information on your credit report it can take up to seven years or more for negative information, like a bankruptcy, to be removed.

Credit repair services will help you repair your credit by helping to remove inaccurate information on your credit report; they also specialize in debt consolidation. Credit repair services put all of your debt together into a lump sum, which they calculate into a reasonable monthly payment which is then distributed to your creditors.

A benefit of consolidating creditor debt is that your credit repair center will work with your creditors so that you are not receiving constant phone calls and collection letters. Credit repair services can also decrease the interest that you’re paying on old credit card debt.

If you’re working with your own creditors you may be able to negotiate a settlement which usually consists of a creditor offering you a pay off at a percentage of your original debt. If you take this route the item on your credit report will show paid in full although it will also state that you settled on the debt, and the amount settled for.

Trying to reestablish your credit is a good idea. Be aware, however, that there are credit card, and loan companies which prey on people with bad credit. Most people have good intentions of paying their bills but due to any number of reasons, say the loss of a family member, termination from a job, or any other type of emergency are often unable to comply.

If you have bad credit and obtain a credit card aimed at people with less than perfect credit you will be paying very high interest rates, some cards will charge a large balance on your new card before you have even used it; such fees are called account set up fees and you may also pay annual fees as well.

Secured credit cards are another way to reestablish good credit. The idea here is that you put down or secure a certain line of credit with your own money. For instance, if you wanted a credit card with a thousand dollar limit you would secure the card by paying a thousand dollars which is then held at what ever financial institution you're doing business with. The available balance is the amount you have secured, so if you use your card you will need to make payments on time, after so many months of consistent payments the credit card company may release the security you put on your card, giving you unsecured status.

Avoid payday loan companies if at all possible – the interest rates are often astronomical and you may find yourself caught in a vicious cycle of only paying the interest. Payday loans or cash advances are a trap that can leave you scraping each week to just pay the interest on the loan.

There are a number of places you can go for free credit card debt help online. One option is to visit a site that will help you with debt consolidation. Debt consolidation via a lower interest rate loan is a viable option. However, stay away from companies that charge inordinately high debt consolidation fees.

A new alternative now available is one of the p2p, or peer to peer loan networks online. Peer to peer, or p2p, simply means that other people will band together to loan you money. Often these are unsecured loans meaning you don't have to put up any collateral. One of the best places to go for a P2P loan is Prosper. A prosper loan is for three years allowing you to spread out your payments.

Know your rights. For those in the U.S., read the fair debt collection practice act to know exactly what your rights are. This act offers consumers a thirty day grace period in which you can dispute a debt. Your creditor can take legal action with in that time even if they have not received a written dispute from you.

There are also sections under the law that will help you prevent collection abuse or harassment you need to learn about statues of limitations when a debt expires as well. Collection companies can no longer request payment on that particular account. Most statues of limitations are for debts four to seven years past their default date, every state has their own laws on limitation statues.

The Fair Debt Collections Act can be found on the Federal Trade Commission (FTC) website at http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm.

For anyone trying to repair their credit, knowing and utilizing the laws is important. Even more important is good financial planning to make sure you don’t fall back into the same mess again.

If you can't control your credit card spending then don't use a credit card. Cut up all your credit cards except one for emergencies (travel, etc.). If you can control your credit card spending, then choose a credit card that also offers no annual fees along with rewards.

Reward cards are offered in a variety of areas and come with a number of different options. One of my current favorites is the Amazon credit card. Every so often I receive a $25 gift certificate that can be used to purchase any of the millions of items that Amazon sells. The certificate is earned according to the amount you accrue on the card. I believe at the time of this writing that $2500 in purchases equates to a $25 gift.

I also use a Discover Card that offers 5% back on all gas purchases. I had previously used a Citi Bank Select Dividend card for that but when they cut the rebate to 2% I immediately set about looking for one with a better percentage and found it in Discover.

Likewise, keep a lookout for the best reward cards and don't be afraid to switch to those that offer the best reward in the area that you are interested in.

In summary, credit cards themselves are not inherently bad. In fact, used correctly they can save you a lot of money while offering you freedom and flexibility at the same time. However, use them to your advantage. Use reward cards and don't have any late payments. You'll improve your credit rating and save a bundle.

Get credit card debt help at EzCashAz.com And, for great interest or an unsecured personal loan visit the p2p loan site, p2pWealth.com. Enjoy all the free positive affirmation videos and wealth creation strategies on Wealth Vibes Motivational Videos page.

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Bob Kish

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