Wednesday, February 14, 2007

Ways Of Consolidating Credit Card Debts

By Pierre Smith

Studies show that most people are in serious debt due to overspending. The compulsive shopper purchases items and will not stop until the card has reached its maximum limit. Those who have this problem won't stop there but also have the nerve to bring another piece of plastic out of the bag. Everything is fine until the credit card bill comes in. Although banks allow the individual to pay the minimum amount before the due date, the remaining figure continues to grow and gets even bigger due to interest rates.

What happens to someone who owes a lot of money to the various credit card companies? For starters, the person's credit score rating will go down making it difficult to get a loan or even apply for another card in the future. Things will only get back to normal when these debts have been paid off. There are a lot of people in the United States and other countries who are experiencing this problem. The only way out for American is by getting the help of a financial consultant.

After reviewing the case, most professionals will advice the client to cut back on spending. This means not eating out very often, watching movies in the theatre or shopping in the mall. Money will only be used for the essentials such as the groceries and the payment for the utilities. The remainder must be used for consolidating credit card debts. If the client has a lot of credit cards, two should be kept while the rest should be canceled. The amount due must be consolidated with the remaining cards making it easy to track the bill when it comes at the end of the month.

Another way of consolidating credit card debts is by applying for another card that has a lower interest rate. This allows the client to cancel everything else and buying more time off everything. Eventually, the outstanding balance will continue to go up even if everything has been consolidated into just one credit card. Instead of waiting for this to happen, the person must already think of other ways to pay off the debt. If there is a lot of old stuff in the house that is not being used anymore, the debtor can hold a garage sale to make off with some extra cash. Another advantage about having a garage sale is that it makes the house clutter free.

Some people may try asking the boss for a raise, which will be easy if the employee has worked there for some time. If the company can't afford to give it, perhaps working over time will work to the person's advantage. The individual can also try getting a second job is the company does not allow overtime due to budget constraints. If the cardholder is married and the other spouse is not working, this will also be a good time for other person to look for work.

It took months for this problem to grow and it will probably take three years or more before the client is debt free. Until that time comes, the individual should just follow the instructions of the financial planner and stick to the plan. Those who make it will have a second chance at life and should learn from this mistake so it won't happen again.

Pierre Smith provides articles that gives you a lot of tips and information to get good credit rating and to avoid bad credit history. Check out his website http://www.bestcreditcardtips.info to get more information how to find ways of consolidating credit card debts.

1 comment:

dee-q said...

Learning how to consolidate credit card debt is one of the best things cardholders can do.

Paying off debt will not be quick and easy though. It takes time and sacrifice.

Some people start with rebuilding their poor credit scores, by getting
bad credit creditcards
.

Here's a list of lenders who approves cards for bad credit.

I hope these resources be helpful to you and your readers.