Decrease credit card debt Today

On June 19, 2008 in General

My name is John Bis and I am working with those that are in arrears with their credit cards for a long time and understand the effects it has on someone’s life. When you have credit card debt and believe that this matter is no longer in your hands, you must make a decision and make it quick. You should not put it off until it is too late. As many of you already know is that the debt collectors are not polite when you contact them with issues regarding your statements. It’s extremely interesting the way it works because when you initially obtain the card they are the politest people while you talk to them. Then if you contact them to argue against a late or over limit charge and try to have it , they might let you off one time a year, if that agent is in a pleasant mood. When it comes down to it what decision are you going to make. It’s not like you can discontinue making payments on your rent/mortgage or other secured debts for your family to survive with day to day living expenses.

The credit card companies made over 17 billion dollars in controversial fees in 2006 and it will be much higher in the near future. Now I am pretty sure that it has happened to you, where you go and open your credit card bill only to discover that your interest has nearly doubled or even tripled. It is tough enough trying to maintain payments with 8% or even the 7.9 % interest that they are charging on your accounts. How are you suppose to pay for the higher payments now? It was cumbersome enough to manage before the interest skyrocketed. This is the reason U.S. citizens are seeking out other options such as credit card debt settlement vs. credit counseling, or bankruptcy. If you do not know much about these options then I will give you a little bit of an education on them.

Bankruptcy

Prior to 2005 bankruptcy was to be used for individuals who were fighting through severe monetary hardships. Regrettably it was misused by way too many consumers who wanted to evade paying their credit card debts. They did not want to be held accountable for their actions. The credit card industry was fed up with this so they pushed to have the bankruptcy laws changed. It is now referred to as the Bankruptcy Abuse Prevention and Consumer Protection act of 2005. This would make it more difficult for many debtors to file for chapter 7 bankruptcy. Bankruptcy should only be used as your very last choice after you have explored every alternative method. Also you should think of the negative aftereffects that could come back later down the road. You would have to find a lawyer, go to court and that could cost you a substantial amount of your hard earned income. There is also the matter of it being on your FICO history anywhere from 7 to 10 years. When you filling out any significant application or document you will always have to say yes when asked the question about bankruptcy, so this does have a long lasting effect on your ability to obtain future credit.

Debt Consolidation Credit Counseling

Everyway you turn, either on TV or the radio, you will hear about debt consolidation credit counseling. A credit counseling organization will try to get the creditors to lower the interest on your credit accounts. You then make one monthly installment to the consumer credit counseling organization and they then make your payments to each one of your creditors for you. The down fall to this choice is even though they lower the interest charge on your credit card accounts you very well may still pay back as much as 125% of what you actually owe.

This is because with this sort of program you will still be paying back what the full original balance was plus some of the interest for around possibly five years or more. Almost half of the debtors that are in these programs don’t finish the program for missing as much as one payment. Another downfall to credit counseling is that if you have a income problem and are cannot make your monthly payment they will kick you off of the program right away. They will also bump up your interest back up and the creditor will not let you back on for a minimum of one year and perhaps even longer. This could put you right back to where you started from, if not in a worse predicament.

Debt Settlement

This is the debt relief method where you can save the largest amount of money. A honest debt settlement company will save you at least 40% of what you are said to have to payback. The 40% should include all the fees as well. Very much like consumer credit counseling, you will hear a lot of TV and radio ads quite often. These organizations are popping up all across America. Some of these companies try to make it sound like they have a magic button and are going to make all your debt vanish extremely easily.

There are even some companies that try to use religion to obtain the trust of people. Whatever company you choose it is your responsibility to due diligence on them. You should start with the BBB (Better Business bureau). You may be able to uncover quite a bit about a company from them. If you discover that a company has only been in settling debts for a little while and has a slew of complaints against them, then you must stay away. Another thing to keep an eye out for is how long has the company been around. Some organizations only survive one or two years before they go out of business or get caught stealing people’s money. Then some of them only stay around to make as much as possible and close down just to open up right next doorday.

Credit card debt settlement is a great way for an unlucky debtor to get out of debt quickly and save them some good amounts of money too.

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