Credit Card Debt Help
By Bob Kish
Are you a credit card abuser? Do you pull it out wherever you go charging here and there for impulse purchases? If so, you are not alone. If you can avoid the impulse buying and pay off your balance every month then your credit cards become a useful tool in your financial arsenal. They are great for emergencies, travel, online purchases, etc.
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. Many people do not understand how good credit can positively impact their lives and how bad credit can severely curtail their ability to realize many of their dreams.
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.
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 to be removed.
You can find credit card debt help online and off, you just have to look for it. Be aware, however, that there are ripoff artists that will send you even deeper into debt if you are not careful.
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.
Debt consolidation via a lower interest rate loan is a viable option. 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. P2P loans can be obtained at Zopa, Prsoper, and the Lending Club at Facebook.
Know your rights. 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. There are 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.
For anyone trying to repair their credit knowing the laws are your most important tool along with good financial planning to make sure you don't fall back into the same mess again. There are a number of good places you can go to start learning about reestablishing credit. Education is power when you feel powerless.