Consolidated Credit Card Debt

  Consolidated Credit Card Debt  - 3 things that can ruin your credit card debt consolidation exercise  - Apr 5, 2007  

Have you consolidated your credit card debts, and find that things are still getting worse? A lot of people consolidate their credit card debts. The idea is to repay the debt back with simpler interest rates and monthly payments to a single credit card company. But, how many of them repay their debts timely? What keeps a borrower fall into a debt trap after credit card debt consolidation? Listed below are three things which can ruin a borrower's credit card debt consolidation process and lure him into a debt trap.

1. Relaxed attitude

Credit card debt consolidation brings immediate relief to the borrower. There are no multiple payments now, no nagging calls, no keeping of record, and if the borrower, got a good deal the interest rates are also low and so are the monthly payments. All this is too comfortable to drive the credit card holder into a false sense of security. It is good to remember that there are debts are just consolidated. Few small things now become one big and it has to be repaid, that too with interest. So, forget the minimum monthly payments, get serious on that debt and repay it as soon as possible. This will keep your credit report in good shape. Else this relaxation will cause endless tension and could lead towards bankruptcy, which is disastrous.

2. Uncontrolled spending habits

It is this reckless spending on useless items that got the credit card holder, this trouble of credit card debt in the first place. And now after the credit card debt consolidation, if the temptations again drive a borrower's spending habit, he is doomed. Remember small things here and there add up at the end of the month and can make the whole process of debt consolidation useless.

3. No money management

Multiple credit cards? No budgeting? No keeping track of expenses? No savings plan? If this is the financial regime prevailing in a borrower's life, debt consolidation simply won't work. The need of the hour is that the borrower takes control of his finances and try to become debt free. The good financial habits acquired in the process of repaying debt should last a lifetime and ensure no further consolidations are necessary. Don't keep more than one credit card unless absolutely necessary. If a credit card comes by mail cut it into four pieces and mail it back to the credit card company.

Debt consolidation is only a temporary solution to any borrower's debt problems. It is there to make your repayment process easy, not to forget about debt and relax.  Debt consolidation without proper attention to above mentioned three factors can ruin your entire effort. On the other hand if you take care of these three things carefully, a fantastic financial future awaits you.

  Consolidated Credit Card Debt  - Huge credit card debt bothering you? This can help  - Apr 28, 2007  

An emergency situation caused a huge credit card debt in your name and now the collection agencies nag you all day for recovering the money. What to do in such a situation? Situation is no doubt bad but all is not lost, it can be stopped from getting worse if you follow these steps.

Don't shy away from collection agents. Answer their calls politely, tell them that you intend to pay all the debt and are willing to negotiate.

Inform the credit card company about your emergency situation and the debt it caused. Explain to them your financial condition, and any foreseeable improvement that you are able to visualize. Credit card companies thrive on their clients and they don't want to loose them. A client who is willing to repay all the debt is a very good asset for them, which they would like to keep forever.

If you are unable to handle debt personally, seek credit counseling and get pertinent advice, so as to get rid of the debt as soon as possible.

If you have more than one credit cards and the confusion on handling their repayment schedule caused you this debt, try debt consolidation. It can be both secured and unsecured. Debt consolidation will help you turn multiple credit card debts into a single one with easier repayment option.

Debt settlement can also be tried to get rid of a huge credit card debt. Debt settlement companies provide expert services to reduce the credit card debt up to 50% or even more. These companies charge a percentage fees on the credit card debt, but can dramatically reduce your debt burden. If you use this option to get rid of the credit card debt, it will reflect on your credit report badly.

The options to get out of credit card debt are numerous, but why get into credit card debt? A habit of saving something every month for emergencies will help tremendously. And not to mention staying within your income limits can keep off the credit card debt.

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