4 Steps to Successfully Paying Off Credit Card Debt

There are a number of consequences to carrying around a significant amount of credit card debt. The more credit card debt you have in ratio to your total available credit, the worse it’ll be when you’re trying to secure a loan in the future. Therefore, the solution is in preparing and following an effective debt management plan to help relieve the burden.

Step One: Stop Charging

The quickest way to get out of debt is to stop creating it. Buy only those things you can afford to pay for up front. Not only will this help you pay off your debt more quickly, but you will learn habits that can improve your financial stability forever.

Step Two: Create a Budget

You can’t successfully get control of your finances until you know what you’re working with. Start a budget. Figure out what your expenses are, and divide them into necessities and discretionary spending. From your discretionary column, choose some things you can cut back. You can use this money to put toward paying down your credit cards.

Step Three: Start Saving

No one should be without two or three months’ worth of savings. Even if you are being crushed under debt, it’s essential to make saving money a priority. One emergency and you could be forced to charge up your cards again without a nest egg. Everyone faces the occasional crisis, so don’t be caught flat-footed when it happens.

Step Four: Make a Plan

You’ve stopped using your credit cards, you’ve made a budget, and you’ve decided to start saving. Now it’s time to start paying off your debt. There are two excellent ways to go about it. The first you can do on your own. Take the credit card with the highest interest rates, and pay that company more than the minimum amount each month. The more you pay, the faster you’ll pay off the balance and in turn lower your credit card debt. Meanwhile, continue making the minimum payments on your other accounts. Then you can proceed to tackle the debt with the second highest interest rates, and so on.

The second way is to enroll in a non-profit credit card consolidation program with someone like Creditguard of America. They will roll all of your credit card accounts into a single bill. You pay a certain amount every month to reduce this bill while saving on interest rates, penalties, and inconvenience. These programs usually come with credit counseling as well, so you can learn valuable techniques to avoid financial trouble in the years to come.

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The Secret Behind Debt Consolidation Companies

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Debt consolidation is a hot topic on the Web these days. The truth is that debt consolidation is a great choice for many people seeking to get out of debt faster. Consolidating your debt means two things: you only have to pay one monthly payment, and you will have lower interest rates.

These two things alone can lead to thousands of dollars’ worth of savings over the life of your loan. You can end up spending decades less time paying off your loan, and your credit score will start to go up. Such is the power of the low interest rates offered by debt consolidation from companies like CreditGuard.

Why Do Credit Card Companies Charge Interest?

The reason that credit card companies charge interest is to make a profit and to be able to lend even more money to you and hundreds of thousands like you. Your interest payments allow them to maintain a steady cash flow because any time a credit card company lends money; it takes a risk that the money won’t be paid back. The riskier the credit card company thinks you are as a borrower, the higher your interest rate will be.

How Can Debt Consolidation Lower Interest Rates?

On the other hand, if you sign an account with a debt consolidation company, you can take advantage of their low-risk status with banks. The best debt consolidation companies are well-known businesses in the financial world that have very little risk of defaulting on their debts. As a result, they obtain lower interest rates while vouching for your debts, allowing you to get lower interest rates as well, since they pass the savings on to you.

How Debt Consolidation Companies Help Your Credit Score

Your credit score is defined mostly by two things: whether you make monthly payments on time and how much unsecured debt you have. As long as you remember to make the single monthly payment, the consolidation provider will pay off all of your loans automatically each month, so you don’t have to worry about forgetting a credit card or loan. Additionally, the amount of unsecured debt will go down more quickly because more of your monthly payment will be going toward the principal loan amounts as a result of the lowered interest rates. Not only does consolidation simplify the process of paying off your debt; it also saves you money in the long run.

Why Get Out of Debt?

Why get out of debt?

Why should I bother trying to get out of debt?

If you’re in debt, you know that it can occasionally feel stressful. When your credit card bill comes in the mail, you may wonder how you’re ever going to pay it all off. You may forget about it, or you may ask whether you should even try to get out of debt.

There are many reasons why it is financially prudent to get and stay out of debt for good. First among them is that you will be better equipped to follow any future dreams you may have. If you have dreams of owning a home, going back to school or sending children to college, you may need to have good credit in order to qualify for necessary loans. Debt may also prevent you from pursuing certain job opportunities, starting a business or other dreams.

Depending on how much debt you hold, you may even need to file for bankruptcy if you can no longer afford to make your monthly payments. Defaulting on your debt is a very serious issue that will stick with you for the rest of your life, severely limiting your choices and making it much harder to live comfortably.

Finally, having a sound financial foundation allows you to live comfortably in all senses of the word. When you know that you can afford whatever life throws at you because you’ve accrued a substantial savings, you live within your means and you have little to no outstanding debt, a level of peace will settle on your shoulders that will extend into all areas of your life. You won’t have to worry about inconvenient collection calls or wondering when the next crisis will put you deeper in the hole.

How Debt Consolidation Can Help

Debt consolidation like from CreditGUARD can help you get out of debt. With debt consolidation, you have the opportunity to lower your interest rates, reduce your minimum payments and roll all of your debt into a single account. You can save thousands of dollars and pay off your debt decades more quickly than if you’d just continued making your current minimum payments.

The beauty of the situation is that not only is getting out of debt desirable, it is possible. With the right help from a debt consolidation and credit counseling service, you can start freeing yourself today.

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What Is a Debt Management Plan?

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The foundation of good finances is good planning. Making sure that there is a deep enough reservoir of money to sustain you through hard times and stocked away in good times will ensure that you and your family never have to wait for basic necessities. Starting a good savings strategy and making a budget that keeps your family fed, clothed, warm and dry is basic home finance, and it is central to any financial plan.

However, any well-planned budget may be broken by unforeseen circumstances. Emergencies such as hospital visits, car breakdowns or convictions may result in savings being drained and debt being accrued to pay the cost of necessary, one-time expenses. When debt happens, you need to put together a different sort of plan. This is known as a debt management plan.

The Goals of a Debt Management Plan

The main goal of a debt management plan is to get out of debt as quickly as possible. This may be done through a variety of methods. You can analyze the effectiveness of a method by figuring out its effect on different parts of your debt profile. For instance, you want your debt to have low interest rates so you don’t have to pay as much each month. You want to do your best to maintain a good credit score or even improve it so you can get better interest rates in the future. Finally, you want to pay all of your credit cards on a regular monthly basis.

Debt Consolidation: The Ideal Solution?

Debt consolidation is a strong contender for many people seeking to manage their debt and pay it off as quickly as possible. It allows you to negotiate with creditors to get lower interest rates and monthly payments that you can afford. It improves your credit score because your payments will be made automatically, so you don’t have to worry about accidentally forgetting one. You will see your debt steadily go down more quickly than if you had just made minimum payments, which provides a sense of accomplishment every month.

Debt management is all about keeping your debt expenses manageable. While debt consolidation may not be the debt management plan for everyone, it is an option that all consumers should consider if they are unsure that they can handle their credit cards or other loan payments by themselves.

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