A Guide to Credit Card Counseling

Author: justin narin

Credit cards are one of the leading causes of consumer debt. Unfortunately, 2005 bankruptcy reform laws made it harder than ever to reduce credit card debt through bankruptcy. Fortunately, you can still find a way out of debt if you’re committed. Credit counseling can help.

If you’re drowning in debt, you have to stop using your cards. Paying cash is the only way to get a true picture of how and where you spend money. Paying cash also curbs your spending because it feels like “real money.” Once you’ve reduced your spending, you’ll have more money to pay off the debts.

Start by cutting up your credit cards. Then contact your creditors and ask them to reduce your interest rates. You should also consider debt consolidation to further lower your interest rates and streamline your payments.

If that doesn’t help you begin to pay down your debt, then it’s time to get professional help from a credit counseling service.

Professional Credit Card Counseling

When you visit a credit counseling service, don’t expect a magic bullet that will eliminate your debts and allow you to keep spending the way you always have. Instead, you’ll be expected to change your spending habits and work had to pay off your debt. Most counselors will walk you through the following steps:

* Stop using credit cards. You can’t get out of debt while you continue to create new debt.

* Analyze your income and expenses. As the counselor goes over your budget with you, she’ll recommend places you can cut your spending to free up more money for debt payments. For example, she may suggest cancelling cable, eating out less, driving less, or not buying clothes, accessories, and entertainment products while you work on your debt.

* Create a debt solution. Most counselors will recommend one of three debt solutions: credit card consolidation, debt management, and debt settlement.

* With debt consolidation, the counselor will arrange for a personal or home equity loan that will be used to pay off your other debts. You’ll then have the responsibility of paying off the consolidation loan.

* With a debt management plan, all of your debts will be enrolled in a 2-4 year program. The counselor negotiates with your creditors to lower your interest rates. You then pay the service every month, which distributes the funds appropriately. You’re barred from using the cards or acquiring new debt while in the program.

* With debt settlement, your counselor will negotiate with your creditors to reduce the total balance due. This option is reserved for very serious situations because it will damage your credit history and credit score significantly. There may also be tax implications.

The solution recommended by the debt counselor depends largely on your current income, necessary expenses, and the size of your debt. Try to find the solution with the lowest fees and fastest resolution so that you can get out of debt and move forward with your new-debt free life.

You should also work hard to change your spending habits so that you don’t find yourself in debt again. Ask your counselor for educational materials about budgeting, money management, and financial planning. The credit counseling service may also offer free or low-cost classes on controlling even your required expenses, like groceries. The more you save on your expenses, the more you have to pay off those credit cards.

If you need to get your debt under control, and the DIY options aren’t right for you, contact a credit counseling service for help finding the best solution for you. You can get out of debt.

For more articles on credit card counseling, please visit: http://www.bills.com/credit-card-counseling/

About the Author:

Justin has 5 years of experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.

Article Source: ArticlesBase.com - A Guide to Credit Card Counseling

Where Do I Get Bad Credit Loans To Consolidate My Bills?

Author: justin narin

If your credit rating has taken a beating, you may be struggling to pay the bills. Low credit scores are often accompanied by abruptly boosted interest rates, which lead to higher expenses. Debt consolidation is a great way to get a handle on your bills, even if you have bad credit. Are you wondering, "Where do I get bad credit loans to consolidate my bills?" Keep reading to find the answer.

Consolidate Credit Cards with Bad Credit

If you have a lot of debt on high interest credit cards, you have three choices to consolidate your bills: a credit card balance transfer, a home equity loan or home refinance, or a personal loan. A balance transfer will get you the lowest rate, but only temporarily. A personal loan will have a rate that’s lower than your current credit card interest rates for a longer term, but it may still be relatively high if you have a very low credit score. Contact your bank to ask about a personal loan. You may also receive offers in the mail. Carefully research the lender before agreeing to any offer you receive in the mail.

If you own a home, a home refinance or home equity loan is your best option. Because the loan is secured by your home, the interest rate is lower than you’d find with a credit card or personal loan. The rate won’t be the lowest possible, however, because those are reserved for borrowers with excellent credit. You may also find that the rate is lower if you have more equity in your home because it gives the bank a bigger financial cushion if you default.

Tax deductions are another advantage to home equity loans. Mortgage interest and most interest for home equity loans or lines of credit is tax deductible, which will free up a little extra cash for paying those bills.

Consolidate Student Loans with Bad Credit

If you need to consolidate federal student loans, you’re in luck. The federal government regulates the interest rates and consolidation rates. You will almost certainly qualify for a reasonable interest rate from any student loan consolidator. Start with your current lender, but contact a few others to see if their terms and discounts vary. Consolidating is more complicated with private loans, but it may still be possible. Contact your current lender for information, then search for lenders online. Ask a few for quotes before accepting an offer.

When it comes to student loans, you should avoid combining them with other debts or paying them off with a home equity loan or cash-out refinance. This is because most federal student loans are forgiven at death or permanent disability and can be deferred while you’re alive. You lose these benefits if you swap them for a different kind of debt.

If you have bad credit, consolidating your debt and bills is a great way to improve your credit history. By paying down debt, you also improve your financial future and your ability to qualify for better credit. No matter what your credit is like, you’ll be able to find someone who is willing to take a risk on you.

For more articles on Bill Consolidation visit: http://www.bills.com/consolidate-my-debt/

About the Author:

Justin has 5 years of experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.

Article Source: ArticlesBase.com - Where Do I Get Bad Credit Loans To Consolidate My Bills?