We help you in Consolidating your Debts

Credit card debt Management is very common these days, basically because people do not think too much before they buy expensive things. Credit cards make you think that you can spend more money than you actually have, so it is quite easy to get into debt, and you might be having problems even before you realize it.

Let me ask you a few questions before I start detailing about credit card debt management. Do you manage to pay your credit card payments in time? Or you have several credit cards and you have already lost track of your payments? If you are late with your payments and creditors constantly remind you of your debt, this article is for you, because I will give advice on how to avoid credit card debt. O not be alarmed if you already slipped into debt, I have useful advice for you too. Let us take it step by step and start with how you can avoid credit card debt.

The most common reasons for credit card debts are the following; general overspending.

This means that you do not think about it before you buy anything. You consider that you have enough money, and you just buy it. You should not consider your credit card as extra cash, you should instead think about the high interest rates. This might make you think twice before you buy something expensive. Another reason is that you do not make your payments in time. Maybe you have forgotten the exact date, or you do not have enough money to pay your credit card company on the agreed date. To avoid this, you should set up a direct debit. Another very common reason for credit card debt is that people have too many credit cards. If you have five credit cards, it is likely that you will use all five, so your debt will constantly grow. In order to avoid it, you should use only one or two credit cards at a time. There are a few other reasons as not prioritizing debts or getting advice too late.

You could see that I did not only list the most common reasons which cause credit card debt, I gave you some advice in the mean time too. If you follow my advice, you can get out of credit card debt. Of course, this applies only to those people, who are not buried in debt already. So, if you just realized that you can not go on like you did, you should make a list of all your credit cards, the amounts owed to each creditor and start to pay them, prioritizing those, where the interest rate is higher or the amount owed is bigger. While you try to pay back your debts, do not use your credit cards, or use only one, and even then, think twice before you buy anything. If you are buried in debt, following my advice might not be enough, you might need serious changes. The rest of the article deals with credit card Debt Management, where professional help is required.

If you are buried in debt and the creditors won’t stop calling you to remind you that you have to pay them, do not get alarmed, you can get out of this very unpleasant situation. There are several ways to deal with your creditors; I will detail the three best options: credit counseling, debt settlement and in the worst case you might need an IVA. Let us start with the first one. Credit counseling helps you to lower your interest rates. This way your monthly payments will be smaller than before, and they will be affordable, even I you are in a precarious financial situation. If you have severe debt, you might qualify to enroll in a debt management plan. This means that you will make monthly deposits to your credit counseling agency, and the agency will distribute it to your creditors. You can become debt free in three to five years if you stick to the plan, and your credit score won’t drop drastically, because after all, you have repaid your depts. Another option for you is debt settlement, or debt negotiation. The term covers a process in which the creditors agree to lower your debt balance by 40 or even 60 %. You can opt for a debt settlement if you are late with at least three months’ payment, or the creditor is threatening you with a lawsuit. You can ask for debt settlement yourself, or you can go to a specialized company. If you would like to do it yourself, you should prepare some documentation, like the amount you owe to each creditor, or you can search the internet and you will find more or less detailed instructions. If you decide to for a company, it is important for you to know that you should not pay any up front fees, you should pay the company only after the debt settlement is negotiated and signed. So do not trust a company who asks fees before anything is done!

As a last resort, you might choose an IVA, an Individual Voluntary Agreement. For this, you will have to hire an Insolvency Practitioner, who will do all the work for you. You will have to give him some specific details: the lists of your creditors with the exact amounts you owe, and any other documentation he needs. He will come up with a plan, send it to your creditors and eventually he will hold a meeting where creditors can discuss the proposal. If your proposal is accepted by 75% of the creditors, the document becomes valid. An IVA is good because it can significantly reduce the amount you have to pay; your credit might become lower with 40-60 %. Also, an IVA is a legally binding document, so you won’t have to deal with your creditors and they are not allowed to contact you until the IVA is valid. You will have to make a monthly payment to your Insolvency Practitioner and he will divide it between the creditors. Just like in the other cases, you can become debt free in three to five years, but pay attention: if you can not make your monthly payments, or you are late most of the time, the IVA becomes invalid, and you will find yourself in a very serious situation.

You can see now that you do not have to get alarmed, you can get out of credit card debt. Although the best thing would be, if in the future you will use your credit cards less, and you would buy only the things you really need. If you think twice before you buy something, you won’t get into debt. Also, learn not to consider your credit card extra money, because it is not extra at all. The more you spend, the more you have to pay back to the credit card company! So, consider using only one credit cart at a time, and learn to use it in a responsible way! Good luck!

Some Useful Sites

Achieve Better Credit - Manage Debt, Learn to Achieve Better Credit, How to Stop Bill Collectors from Calling, Repair or Build your Credit. Bankruptcy, Foreclosure Options.