Debt Problems? Find a Credit Management Solution for Debt Relief

If you have debt problems, chances are you’d like to find some debt relief. Debt comes in many forms, including credit cards, medical bills, personal loans, store credit and collection accounts. These debts have varying interest rates and fees associated with them if you don’t pay on time, which may result in more money being taken out of your accounts.

If you want to break free of the cycle of debt, the solution is right in front of you: Debt consolidation is the key to managing your credit effectively and finding debt relief.  Most credit management programs like those offered by Creditguard offer some form of consolidation.

What Will Debt Consolidation Do For Me?

Most debt consolidations provide you with lower interest rates and waived fees on all of your debt accounts. The process involves giving your debt consolidation provider access to your payment accounts. The consolidator will be responsible for paying your monthly payments on time. In return, you will pay the consolidator equal to or even less than what you currently pay each month to service your debts.

How Does the Consolidation Provider Make Money?

Most debt consolidators are non-profit organizations that do business on a large scale with creditors, and their clout allows them to negotiate on your behalf for lower interest rates. The savings goes toward the consolidation service’s administrative expenses or goes directly into your pocket. Because they are non-profit, they don’t need to worry about profit margins.

Ultimately, the benefits of debt consolidation are numerous. They include:

  • Paying off your debts much sooner
  • Saving thousands of dollars in interest payments
  • Quickly improving your credit score
  • Ending inconvenient debt collection calls
  • Providing peace of mind

Debt relief is available to everyone, and it is a win-win situation for all players involved. If you are in debt, consider debt consolidation.

Credit Counseling

Many debt consolidation providers also offer credit counseling to help consumers with the basics of personal finance. This includes making and keeping a budget, managing their money and learning how to tell if a credit offer is good. Counseling will help you learn how to live within your means and save money toward a better future for yourself and your family. The lessons you learn during a credit counseling session will help you achieve debt relief, and you can use the personal finance techniques for the rest of your life.

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How Debt Counseling Can Save Your Finances

debt counseling (credit counseling) can make a difference in your life

Everyone needs a little help sometimes. Especially in the midst of a struggling economy, it can be challenging to get yourself back on your feet. Putting a lot of money on credit cards or taking out personal loans is how many people survive when times are tough. The problem is that if you can’t pay the minimum payments on those loans, you may experience issues like a reduced credit score, collection calls or other financial issues.

Debt counseling (also known as credit counseling) is a service provided by companies like CreditGuard of America to help you through your financial problems. A counselor will sit with you and give you useful advice to help turn your finances around and get rid of your debt for good. They do this by educating you on important topics such as setting up and keeping to a budget, being frugal, living within your means and understanding financial agreements. Your debt counselor will give you all the tools you need to make sure that you get out of debt and don’t get into it again.

Debt Counseling and Debt Consolidation

Debt consolidation is an important tool for credit management that debt counselors use to help with debt. It involves consolidating all of your debts into one payment that can much lower than what you’d have to pay all of your creditors each month. Debt consolidators accomplish this by communicating directly with the credit card companies and convincing them to give you lower interest rates and reduce your monthly payment.

This will ensure that you are able to afford all of your debt servicing and free up money to spend on essentials like rent, utilities, food and savings for a rainy day. Best of all, you only have to remember to make one payment each month. No more worries that you’ll forget about one of your credit cards! Just make the single payment every month, and the debt counseling service will do all the rest.

Debt Counseling and Your Credit Score

Some people are nervous about debt consolidation because they’re worried that it will hurt their credit score. This is not true! Debt consolidation is not a loan, and it will not harm your credit rating. Instead, it will help your credit rating because all of your debts will be paid regularly and on time. If you want to raise your credit rating and keep your finances strong, find a debt counseling program and give it a try!

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How to Choose the Best Debt Consolidation Programs

If you’re dealing with unmanageable debt, don’t worry: You’re far from alone. Millions of Americans struggle to keep up with high interest debt on a daily basis, with many choosing last-resort options such as bankruptcy to get out from under the crushing weight of those accounts. Fortunately for many, there is a better way. By consolidating your bills, you may be able to procure better interest rates while reducing the amount you owe. This can put you on the fast track to financial independence, but it is hard to do without a guiding hand. How do you find the best debt consolidation company? Here are some aspects to think about:

Recommendations

If you know someone who has used such a service to get out of debt, you might consider asking them about the company. Due to the private nature of your personal finances, casting a wide net may not be advisable or beneficial. However, speaking privately with someone who has some experience with debt consolidation can be an invaluable step towards finding the right company.

Nonprofit Status

Don’t be misled by the many companies that take advantage of people in financial trouble. Your quest for the best debt consolidation programs should begin and end with those services that operate on a nonprofit basis. Not every for-profit company is a scam, but it can be very difficult to tell the good guys from the bad.

Reputation

The Internet is a wonderful tool when it comes to vetting a company. Before you inquire more deeply into any particular company, search their name in a search engine and see what comes up. What are people saying about their service? What does the Better Business Bureau have to say about them? If the company is the subject of multiple unresolved customer complaints, you may want to go elsewhere.

Ask Questions

Chances are, you weren’t born an expert on credit, debt and the complex financial concepts that surround consolidation. Because of this, talking to a credit counselor or a debt consolidator can be intimidating. Make sure, however, that this intimidation doesn’t keep you from understanding the process. Ask as many questions as you need to. If you really have found the best debt consolidation company, they will have representatives who are happy to answer each and every one of your inquiries.

Education

As a corollary to asking questions, make sure the company you choose has an excellent credit counseling program in which you can enroll. Consolidating your bills is an important part of recovering from debt, but it is only one piece of a larger whole. With credit counseling, you can learn how to pay off the existing debt while also learning how to avoid this situation in the future.

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How to Get a Financial Fresh Start with Debt Consolidation

get a fresh start financially

People find it hard to stay motivated when dealing with overwhelming bills, but debt consolidation could help you get out of the nightmare situation. You never intended to take on so much debt, but credit problems tend to grow gradually until they become unmanageable. Each small payment seems reasonable and affordable, but then some emergency causes you to miss a payment. Lenders raise your interest rates, and low-interest credit card debt becomes a high-interest burden that never goes away.

Interest Charges Take Most of Your Minimum Monthly Payments

Paying the minimum on your loans covers interest charges, but the loan balances stay high so that you never seem to get lower balances. Real financial freedom involves paying off your debts because plans that involve bankruptcy, settlement or consolidation loans generate other problems or limit your prospects for buying a home, getting a loan or finding a better job. Debt consolidation makes it possible to pay off your loans, protect your credit and get a fresh start financially.

Compare Your Options to Pay Off Debt

You can try to pay off debt by applying more of your resources to monthly payments. If you keep paying minimum balances each month, you will probably never get out of debt. Try reducing your nonessential spending and making smarter choices on those goods that you do buy. Ways to reduce your monthly spending and increase your resources include the following tips:

  • Give up the premium entertainment services that you hardly ever use.
  • Buy essential foods in bulk and use coupons but only for those items that you would normally buy.
  • Eat more of your meals at home and try brown-bagging your lunch.
  • Give up the expensive coffee beverages and stick to basic house brands.
  • Look for extra sources of income in your spare time such as doing yard work, babysitting, sewing or typing.
  • Change your withholding status at work so that you have more money to spend each month.
  • Investigate a legitimate debt consolidation program to see if you qualify for its benefits.

Debt consolidation involves contacting your creditors and getting them to lower your interest rates, drop fees and accept new payment arrangements. You also get expert debt counseling to help you get your finances in shape.

Problems with Using Unsafe Ways to Pay Off Debts

Other strategies, such as taking out consolidation loans, getting new credit cards or trying debt settlement, are not recommended reputable companies like Credit Guard for these reasons:

  1. Secured loans involve taking on closing costs and paying points for second mortgages, and your debts just get transferred and not paid.
  2. You could lose your home or collateral by transferring unsecured debts to secured consolidation loans.
  3. Good credit counseling advice never recommends using credit cards or payday loans to solve long-term financial problems.
  4. Settlement or bankruptcy could ruin your credit, make it hard to get a loan and cause bad results when you try to find a new job, get insurance or buy or rent an apartment or home.

Paying off your debts is the only practical way to get a fresh start that doesn’t limit your options. Find ways to pay off your unsecured credit card debt by making larger monthly payments. If this plan doesn’t work, then the best debt consolidation plan is simple: Change your monthly interest and payments through debt consolidation services.

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