SimplyFinance - Credit Relief

What You Should Know About Credit Card Debt

2008-03-13T00:00:00Z

The numbers regarding credit card debt are staggering. As of April 2005, US credit card debt had risen to an astounding $753 billion. According to Yahoo! Financial, "Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come." This credit card debt, compounded with higher living costs, has prompted the accountancy firm Grant Thornton to predict “that 28,000 people would declare themselves insolvent in the first three months of this year, with the total eventually reaching 120,000 for the whole of 2008.”

FT.com reports that Alan Duncan, the shadow business secretary, has “launched a scathing attack on the widespread credit card industry practice of offering zero per cent interest for short periods on purchases and debts transferred from other cards.” In his interview with the Financial Times, “Mr. Duncan warned that vulnerable consumers were being ‘seduced into (credit card) debt which if they had to pay interest they couldn’t possibly afford.’”

Some other effects of credit card debt and the inability to pay this credit card debt on time are that you will be charged a late fee and your delinquency will be reported to credit rating agencies. When a negative report goes on your credit history, you will find it harder to secure credit in the future, and if you are able to find financing, you will be charged a higher interest rate than you would if you hadn't allowed your credit card debt to get out of hand. When you apply for a loan or a credit card after you've had a negative report put on your credit history, your potential lender will see this, and they'll have to make their decision knowing that you've been delinquent in your payments in the past.

There are several practical steps that you can take if you feel bound by credit card debt. The first is to simply stop charging. If you do not have enough in your checking account to cover the cost of something, perhaps you need to go without. Secondly, call your credit card company and ask them for a lower interest rate. Explain your troubled economic situation, but beware of their seductive offers of balance transfers, etc. If neither of those steps alleviates your credit card debt enough, then consider coupling that effort with debt consolidation or with debt management.

Finding a Credit Solution That's Right for You

2008-04-07T23:00:00Z

One of the most widely used services to provide information on credit is Experian. They are listed on the London Stock Exchange (EXPN), and they make up part of the FTSE 100 index. Its headquarters are in Dublin, with smaller operations in the U.S. and in Nottingham, UK. Experian works in 36 countries, with customers in over 65 countries. Apart from providing credit reports, they offer a lot of advice on credit solutions.

The first step in developing a credit solution is to know where you currently stand. Experian’s website informs us that because “lenders use your Experian credit report when deciding whether to make you an offer and what interest to charge you,” it is extremely important to know what your score is and why it is so. They offer free reports online, as well as free trials for unlimited credit history access, fraud alerts, and phone advice from their specialists. Once you know your score, you will be able to form a credit solution, which will most likely have many steps.

The second step in a credit solution will be to pay your bills on time. If this seems impossible to you, then you will need to fill out a spending log so that you know where every pound is going. Once you have laid out your expenditures in writing, you will see where you can sacrifice, in order to pay your bills on time. Another step towards a credit solution will be to enquire about and solve inaccuracies in your credit report. This is not an easy credit solution, as it requires you to write to the credit agency and the reporting institution. You will have to be persistent; however, the correction could help your credit score significantly. Finally, you may want to enlist the help of a credit solution specialist. But, beware. Do your research so that you employ a reputable organisation.

If you have bad credit, all is not lost for good. The credit solution may take years, but determination, persistence, and listening to good advice will pay off. Loan.com informs us that “late payments and charged-off accounts roll off of your report after seven years, and bankruptcies after ten. Creditors look at your pattern of payments as well as one-time occurrences, so keep in mind (that) a good pattern of payment can make a positive impact on those blemishes.”

What to Know About Credit Card Loans

2008-04-14T23:00:00Z

For our purposes in this article, we shall call debt consolidation loans or credit card debt loans, credit card loans. These are loans that can be taken out in order to consolidate credit card debt. Credit card loans can simplify your financial troubles, by leaving you with one lender, one due date, one interest rate, and one monthly payment instead of juggling several different credit card debts and their requirements.

Credit card loans are widely available and are either secured (counting your property as collateral) or unsecured. Generally, secured loans are more easily obtained because the creditors are more assured of being paid back. If you were to declare insolvency and then file for bankruptcy, the creditors would get more back on a secured loan.

If you are eligible for secured credit card loans, ehow.com suggests that you begin by surveying many lenders to find the best deal possible. You then will want to figure out exactly how much you need to borrow and can afford. Many sites, including Bankrate.com, have calculators that can quickly crunch your numbers. Check out the fees involved, including any early repayment penalties. And remember that in secured credit card loans, you are using your property as collateral, which means that you could lose it if you become insolvent. Finally, you will want to pay off the loan as soon as possible.

In the case of unsecured credit card loans, the same suggestions apply. If you are having difficulties obtaining unsecured credit card loans, the problem may be your credit score. You can learn your credit score at Equifax or Experian, both of which have easy to use websites. If this is the case, you will have to reorganise more than your credit cards.

Finally, as with any loans, including credit card loans, beware of scams. If the offer sounds too good, proceed with caution.