A Quick Credit Card Debt Consolidation – DIY Guide

If you are experiencing debt problems, then you are not unique. Statistics have shown that in our country on an average, people have eight credit cards and an average debt of $ 9340. An inflated rate of interest of 18-25% (mainly credit cards) is just one of the reasons attributed to why the debt has grown at an annual rate of 5%.

With the growth in debt problems throughout the country, there is also consistency as to the accelerated emergence of debt consolidation credit card services. These companies generally propose resolutions to help combat your debt problems with charging fees or without.

If you are careful enough, you can consider debt consolidation yourself and keep your rates by consolidating your debt repayment.

You should negotiate terms with your creditors and ask to reduce interest rates and late fees which usually are the biggest obstacle to absolve debts. With that accomplished, you have to create a budget and comply with diligence. You should review your tax status of the cases so that you can have more control over your income.

DIY Debt Consolidation

In general, the first reconcile debts include those bearing a higher interest rate. Once you take care of the debts, you'll notice a big difference in your monthly budget. And if you're looking to reduce the interest given to the creditors by covering less debt, a do it yourself debt consolidation could be a smart choice. Here are some steps to follow when considering debt consolidation.

Prioritize debts by organizing a list of your debts (with creditors) and the rank order of priority. Next calculate affordability by building a list of your regular income, including wages, any state benefits, child tax credit, child tax benefit, work tax credit, and so on. Then calculated how much you can spend a month on of all debts.

Once this is done it is time to contact your creditors. Choose whom to pay first by determining whether your creditors are still in control of the debt or if they've sold off your debt to a collection agency. If the creditor controls the debt, you can prevent further contact, if the statute of limitations expires. This can be done by sending a letter. If your debt is turned over to a collection agency, is better than forcing them to corroborate the claim before you start paying.

You should discuss the terms with creditors and ask to reduce rates, thus reducing the payment of inflated interest debts. Also, make sure that your total monthly debt payment does not exceed what you can afford. While you are purchasing a declining level, is able to negotiate waiving late fees.

If you have several credit cards with a low debt amount to each, you will be able to consolidate them doing a balance transfer. This is administered by transferring balances to different cards one with a lower rate of interest rate or 0%. Therefore, one could achieve a single payment instead of multiple payments on all cards and pay much less in interest. However, before committing a balance transfer, make sure to examine the conditions of the 0% APR card and check for a period of sustainable introduction. This is because if the introductory period is quite long, you will have enough time to pay the total levy rate of 0%.

When considering the DIY credit card debt consolidation, self-control is extremely important. Be accurate when formulating the budget and you'll soon will be going to live a debt free life once again.

Good Debt vs. Bad Debt – Simplified.

When planning a debt free life it is important you understand the types of personal debts you owe and see things in a right perspective.

Good Debt

Any debt that is a result of borrowing money for any purchase that has future value built in, for example: a home purchase, investment or a student loan for college education. These types of debts are known to be “good” because they can help you build wealth and success.

A mortgage loan is the most popular personal good debt! You take a loan, which will financially help you build or buy a home. It is considered as an investment because the home will eventually be yours only!

Bad Debt

Debt that can be turned over to debt collection agencies such as credit card debt, personal loans and other unsecured debts are known to be bad debts. These debts often carry high interest rates as well.

In essence anything you purchase with credit or can be financed, that is unsecured (doesn’t require collateral) and devalues with time, is bad debt. Even food and clothes, that are essential, which were purchased with a credit card, are bad debts. Put your effort in keeping bad debts to a minimum while paying the full balance of these debts on time.

Tackle them both.

Keeping good debt apart from bad debt is a wise decision. Don’t make the mistake of consolidating unsecured debt with a mortgage loan, which is secured, by taking a bigger loan and using the difference to pay of bad debt. Not in all cases it is profitable and it can put your asset in risk.

When managing your monthly payments, paying off higher interest rate debt first is highly recommended by most financial experts. By doing so you are reducing the bad debt faster giving you more financial freedom in the future to pay off more debt, in larger sums.

Recommended Reading: Good debt, bad debt at WiseBread.com

Credit Card Debt Collections

Yes, you can get out of credit card debt. If you're determined to get out of credit card debt can surely get out of debt card credit. Although a bit difficult to get out of credit card debt is not impossible. All you need to get out of credit card debt is determination and planning. Both are equally important (or maybe determination is even more important). Determination is not without cause.

By It is therefore necessary to first ask this question to himself – "What will I get if I can get out of credit card debt? ',' What Will it make difference ',' What's in it for me 'or' Is it really beneficial to get out of credit card debt. Use the responses to build your determination. The fact that all the nagging by mail / phone (by credit card provider and / or collection agent), will be gone, should do good to strengthen your determination and should provide you with a reason why you should try to get out of debt card credit.

Think of the stress-free life after leaving the credit card debt. Try to link various reasons together and try to see the benefits through them. All these together help to strengthen their resolve and prevent it from getting weak at any point in time.

The second thing you need to get out of credit card debt is planning. Planning to exit the credit card debt will start making a list of credit cards that currently owns and noting the debt and the APR for each of them. The sum total of all these debts from various credit cards, you will the total credit card debt. It is also necessary to check if you have been in default of some of these credit cards (and therefore incur a late fee). You will have to avoid that and put it on the plan you have prepared to leave the credit card debt.

The next step in getting out of debt card Credit to verify its current financial position and make an assessment of what you expect your future financial situation to be. Then, research to check the balance transfer several offers on the market to see if one of these can be beneficial for you. Use this information to calculate the amount of time required to exit the credit card debt and how to distribute the debt payment through your credit card number cards (for ensuring that you pay the debt that is hitting more and also to ensure that do not incur late fee on credit card payments).

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Uchenna Ani-Okoye is an internet marketing advisor and co founder of Free Affiliate Programs

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Credit Card Debt Collection

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