Toss Out Debt: How To Pay Off Credit Cards

The below video is not what Dave Ramsey teaches, but is a video that comes to us via the site we recently merged with. Posting of this video, does not mean I am in agreement in whole or part, but am presenting it so you know there are other views of how to eliminate your debt.



***Note: This article is from a website that was recently merged into this site and may not represent the views of the sites owner. ***

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Toss Out Debt: Understanding Debt

Understanding Debt

Debt is simply the money you owe - it is an amount of money or other property that is owed by one person, organization or company. It is not the credit you owe as credit turns into debt. Getting into debt is very easy and maybe fun for some people. At first people are happy, they can buy without having to pay with cash, and they can afford to get a car even without having the budget. But seldom do they they realize that they will live and drive this car for 12 years to make payments and pay huge interest for their showpiece!

Who hasn't heard of cholesterol? Just like cholesterol, where there is good and bad cholesterol, debts come in two versions. Good and bad debts. Debts can make your life easier or ruin your life but however bad your debt problems, there is a solution. People and businesses who know how to handle debt and how to manage their credit can take advantage of debt while people especially the young who do not have knowledge about debt management and creating debt reduction plans are always in trouble.

Debt can also be classified as temporary or chronic debts.

In most cases, there are very good reasons to take on debt. For example, students take loans which is sometimes necessary provided they know how to handle and pay off these debts on completion of their studies.

Also taking on debts for setting up a business is good but it depends how the structure is going to be setup. You must have a clear plan, and know how much money you would need and most importantly, how to pay it back.

If you can afford to pay cash and limit the risk of taking on debt, do it! Do not hesitate to pay by cash when you have the money.
The problem arises when you borrow money but do not use it productively. Debts are good when they are invested, not used as spending money.You must have total control over your debt and have a clear plan on how to pay back your debts. Create plans, especially rapid reduction plan.

Fixing Your Credit

We are a country in debt. Not only is our government in debt, but we, as Americans, are in debt ourselves, and the problem is just getting worse! Recent studies have shown that ninety percent of Americans have at least one credit card – and they are using that card – A LOT!

The average family carries a balance of between $7,000 and $10,000 on all their credit cards. Over $1,000 per family goes towards interest every year. And that’s just the average – some people owe much more!

Overall, Americans spend over $1 trillion every year on their credit cards, and owe more than $500 billion on it. If debt continues at the current rate, then one family in a hundred will be forced into bankruptcy. Over 90% of Americans’ disposable incomes are spent paying back debts.

When you add credit card debt to the regular bills we have to pay each month, our budget goes through the roof! As a result, some bills go unpaid and others are paid late.

Both of these instances can damage your credit sometimes so much that you think there’s no way you will ever be able to get out of debt and use credit for something important like a home or a car.

The truth is that you can get out of debt and repair your credit nearly to what it was before you had credit problems. It takes some time and a little work on your part, but it IS possible.

Loan approvals depend a lot on your credit score. This is what determines if you can get credit, what your interest rate will be, and how much money potential lenders will give you. A good median score is 750, but the higher your score is, the more financially sound you are.

While it’s always a good idea to try and stay away from credit, not everyone has a hundred thousand dollars lying around to buy a home or twenty thousand to buy a car. Heck, for some people, scraping together five thousand dollars for a good used car is difficult. That’s why we need credit. So we can buy things which we cannot afford to pay cash for.

The trouble begins when people begin to buy everyday items such as groceries and clothing on credit cards. Then those bills begin to get bigger and bigger until pretty soon, they’re paying the minimum amount due which will take forever to pay off. Plus, a lot of people just continue to grow their credit card debt even when they have a large balance on their account.

Your credit score defines who you are to businesses and you want it to be as high as it can be. It doesn’t matter how bad your credit is now. There are ways that you can raise your credit score no matter how low it is now. Don’t despair; just get started – right away!

***Note: This article is from a website that was recently merged into this site and may not represent the views of the sites owner. ***

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How To Get Out Of Credit Card Debt

Wednesday, while my fiance and I was celebrating an early Christmas with my parents and brother, I received a call. The call was from someone in Alabama (area code 334). They were wanting to know, how to get out of credit card debt.

My answer was blunt. Cut up and cancel the cards and pay them off as quickly as possible. The gentleman on the other end didn't like that. His reply was that he couldn't cut them up. To which, I bluntly told him, that he wasn't serious about getting rid of his debt.

This guy isn't alone. There are thousands more out there with the same attitude. Let's think about it for a minute. If you are unwilling to get rid of your credit cards, how in the freaking world do you expect to get out of credit card debt?
People, it isn't brain surgery, it's really quite simple. You can't get out of credit card debt specifically, if you are still using the stupid credit cards. Likewise, on a broader scale, you can't get debt free, if you continue borrowing. You MUST stop the borrowing completely before you can get out of debt. There is no other way around it. You have to learn to spend less then you earn. If you are borrowing, you are not doing that and thus will remain in debt.


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Toss Out Debt: Avoiding & Getting Out of Debt

Get Out Of Debt

Research has shown that people do not deal very well with debt and take debt seriously. This leads to huge bills and debts accumulation and long term interest payments.

The following tips will help to avoid debt:

- If you have credit card debts, which is in most cases the biggest source and the most serious of debt accumulation especially for students and new graduates, you must pay it off as quickly as possible to avoid long term repercussions. Take this advice seriously, because ignoring or delaying any payment can become a nightmare and eat you alive.

Learn how to calculate interest as explained in another section

ALWAYS check the interest rate. You must ASK first, you must receive clarifications before choosing a credit card.Don't always assume that you have the lowest interest rates.

Having multiple cards is like owning multiple weapons and you will risk injuring yourself. Keep one or maximum two credit cards with you. This way you can handle your debts easily.

Educate yourself on how credit cards calculate interest. Then, check the interest rate on your credit cards.

Know what you can afford to pay! Never use your card for something you cannot pay for with cash. When you have a checking account and have a debit card, use it. This card is very useful for small items rather then even paying interest for small items. Credit cards make paying money easy. They also make going into debt easy.
Always have a plan to pay back your debts. If you need to buy something, think first “how can I pay it back?”



Are You Drowning In Debt?



Are you drowning in debt? Or would you just like to be free of the debts you have?

This resource helps you summarize your debts and create a Debt Reduction Plan that will show you how to pay off all your debts much sooner than you would by paying only the minimum.

After reading this section, you will be able to reduce or/and eliminate your debts in as little time and/or with as little interest payment as possible. Believe it or not, you will succeed to make the dream come true.

This section will be followed with real-life examples, on how to reduce debt for a given payment.

Keep in mind one word: “Interest”.

Interest is a magical tool, interest makes you rich or poor. Creditors always use it to their advantage. Remember! It can also work in your favor if you really followed this guide. Let the interest work FOR YOU instead of AGAINST YOU.

Getting out of debt and becoming debt free will require patience, commitment, and consistency. The most important part of this step is to restructure the way you pay bills and set priorities.

We know very well that everyone is excited about getting a fresh start especially upon graduation, and unfortunately in most cases this start is at the same time the beginning of debts!

You will accumulate loans, credit card bills, and miscellaneous expenses and costs. These debts you are building will unfortunately stay with you for a very long time if you do not know how to manage and get rid of them in the shortest time by paying the least interest. Debts and interest charges can eat you alive!

The first advice to become debt free is to pay attention on how you are spending your money, the second advice is to summarize your debts and get a debt reduction plan.

***Note: This article is from a website that was recently merged into this site and may not represent the views of the sites owner. ***

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Blizzard 2009

With the blizzard of 2009 many people around the area and the country had their holiday plans changed. Thankfully my big Christmas trip was the early this year, day before the blizzard started. The storm was officially called a blizzard by the weather service and was a Christmas Day record. In 1895, a Christmas day snow recorded 3 inches of snow. This year Christmas day recorded more then 4 inches, adding that to the snow that came on Christmas eve, this area seen a combined total accumulation of 8.8 inches. More snow is expected today and tomorrow yet.

As I said, with all that holiday travel was altered for many people. My parents were among them. They didn't make the 90 mile trek to my sisters. My soon to be step daughter didn't cross town to spend Christmas with her mom and me. Of course there was hundreds more throughout the Midwest possibly thousands that heeded advice and just stayed in. Of course there was hundreds of others that got out anyway. Many of them ended up getting stuck on side streets or parking lots that weren't plowed or treated. Even police cruisers weren't immune to getting stuck. There were a number of reports of private citizens coming to the aid of the police, so they could get moving again.


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Toss Out Debt: Raising Your Credit Score

Raising Your Credit Score

The very first thing that you must do in order to raise your credit score is to order your free annual credit report and find out what your credit score is. Once you have obtained copies of your credit reports from all three credit reporting agencies: Experian, Equifax, and TransUnion, you must take the time to go over those reports to check for errors and inconsistencies.

It is imperative that you correct any mistakes or inconsistencies as soon as possible. This is the most pro-active step you can take for yourself to increase your credit score as mistakes can and do happen.

Look for accounts that were previously delinquent but which have since been paid off. Find any accounts that were closed or any accounts that aren’t yours. Then take steps to correct those errors by contacting the credit bureaus and beginning the process in writing to have these errors removed from the report. This alone can raise your credit score.

Checking your credit report often can also indicate if you have become a victim of identity theft which is something that is happening over and over again with frightening frequency. It affects millions of people and can wreak havoc with your credit rating.

Correcting the problem of identity theft is a process that will take quite some time, but it can be done with patience and excellent documentation. You should definitely be contacting the FTC and filing a police report in this situation so that you credibility cannot be called into question.

In the above section, we discussed extensively the option of filing for bankruptcy. This should be done only as a last resort and if you are in dire financial straits that cannot be solved if you just don’t have the means to pay off your debts.

Filing for bankruptcy doesn’t have the stigma attached to it that it once did and is nothing to be ashamed of. While it’s true that the bankruptcy will remain on your credit report for up to ten years, lenders know that you will not be able to file for bankruptcy again within that time frame, so you may actually be able to obtain credit anyway after a bankruptcy.

Before you resort to a bankruptcy filing, you can first try getting the advice of a credit counselor to help get you back on track when it comes to your money problems. Find a reputable company that provides results and know that you will be paying a small fee for this service, but one that will probably be worth it in the end.

Credit Counseling

Credit counseling companies not only work with your creditors to secure lower repayment rates, but they provide financial planning advice for you to use in the future so you are not put in the same situation you were in before.

If you do have steady income, you may want to look into a debt consolidation loan. That way you can pay off your creditors and make one monthly payment to one company instead of several monthly payments to several companies.

There are also companies who can help with debt consolidation loans although you can certainly do it on your own. They can, however, secure loans for you with a lower interest rate and shop around to different companies to find you the best debt consolidation loan and help you get out of debt.

If you have bad credit, expect to take about a year or two to get it up to a better credit rating. How do you do this? Let’s review:

Pay your bills on time. This alone will show good faith to your creditors and have a positive effect on your credit rating

Don’t use credit at all if possible. That means cutting up your credit cards and paying cash for the things you need.

You may want to keep one credit card that you can use for emergencies – but remember that it is for emergencies only. Keep the oldest card you have as that shows you are not newly applying for credit.

A good idea for not using that one credit card is to freeze it in a block of ice. It won’t damage the card and it will require thawing before you can use it. That way, you will have to wait before making a purchase thus eliminating the lure of an impulse purchase.

Don’t apply for new lines of credit at all. The only time you should ever be applying for credit when you are financial straits is if you need to make a big purchase such as a vehicle or home.

Monitor your credit report faithfully and immediately correct any mistakes that you find.

If you find that you cannot make a payment on time, call your creditor and explain the circumstances. If you have been a good customer, they may be willing to accept a late payment and waive the late fees. Try not to do this too often as it can reflect poorly on your payment history.

If you have little to no credit, you can establish credit by obtaining a department store or gas credit card. Then you make a few purchases and pay the balance off immediately.

Be very careful when making purchases online. Make sure that when you are entering in your credit card number it is done on a web site that starts with https://. The “s” at the end of the http designation shows that it is a secure sight that will keep your information private.

Beware of “phishing” e-mails that direct you to a separate site where you are asked to provide personal information. This is how many identity thieves obtain your bank account or credit card numbers and they can run up horrendous bills in a few moments of time.

If you want to obtain a large loan as for a vehicle, you may want to try and get a co-signer who has good credit. Their good name and credit history can help you get the loan and build your credit at the same time.

Again, we want to iterate the most important thing about maintaining good credit and raising your credit score: MAKE YOUR PAYMENTS ON TIME! And use credit sparingly.



There are a lot of great tools available online to help you with credit and making credit decisions. Go to www.myfico.com and check out some of their calculators. Since FICO is the company who assigns you that magic little number that is your credit score, they are a great source of help for the consumer. At this site, you can find out:

Which loan is better

How much your mortgage payments will be

How much money you can afford to borrow

Whether or not you are better off refinancing a loan

How much refinancing costs will be

Whether or not you should consolidate your credit cards

How long it will take to pay off a credit card balance

How rate changes will affect your loan balance

And much, much more!



You can also find many other websites that can help guide you through not only the credit process but how to get and maintain a solid credit score and rating.

Last, but not least, don’t forget the three major credit card reporting agencies. These are the places you should start to obtain your credit report and get on your way toward better credit.

Experian: www.experian.com

TransUnion: www.transunion.com

Equifax: www.equifax.com

Plus, you can also go to the following websites to obtain your annual free credit report that is available once a year to all consumers:

www.annualcreditreport.com

www.freecreditreport.com



***Note: This article is from a website that was recently merged into this site and may not represent the views of the sites owner. ***


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Toss Out Debt: More Debt Help Tips

There is always a way to get out of debt especially if you organize your money
and know how to and when to pay.

If you
follow the steps below, you can help yourself to become debt
free.

1- KNOW
what you owe.

You must
know and identify clearly what you owe; the best way is to create a
debt list with details for example:
 

Useful
Tips

 

Name/Item	Amount	Interest rate	Monthly Payment
Credit card	$5600	3%	$680
….	…	…	…

And
identify which payment has the highest rate thus allocate the highest
priority to it.

2. Avoid
creating new Debts. When you are already in debt, do NOT create a new
debt. Try your best to create savings strategies for the expenses that
you do not pay monthly, for example some bills are paid quarterly. Even
though, this bill is paid quarterly, keep aside the amount aside each
month.

3.
Decrease your expenses by developing a clear strategy and try to
increase your income.

4. Do
not always use your credit card.

5.
Always create a list of items you plan to purchase and know the amount
you are planning to spend. 

6. As
soon as you develop a plan with your monthly income and expenses, you
can set the good amount for paying your debts. Remember, as we
discussed previously, adding an extra amount to your monthly debts
payment can decrease the interest payment and save time. When you have
money with you, and you really do not need to spend it add this
amount to your monthly payments.

7. Being
debt free is not only a way to manage your money, but also a
negotiation tool. Try to find an alternative with a lower rate. Use
negotiation, tell your current creditor that you’ve obtained
lower rates with another provider; this might result in their reducing
rates to
keep you as a customer.

8. Think
before you buy! Sometimes you buy for an item and later on realise
that you do not really need it at the moment. Think well before
planning to buy. Ask yourself “do I really need this
item?”

9. As we
mentioned in Chapter 1, we have good and bad debts, stay away from bad
debt. Stay away from:

- High
interest credit cards

- High
interest items

- Big
mortgage

10. Do
not buy a brand new car when you cannot afford to pay it.

Get a used one and keep it for many years.

11. Be
smart and reasonable.

Those
are some steps toward being debt free, but getting out of debt is
challenging but for sure it can be done especially with dedication and
perseverance.

When you
are asked to decrease your expenses, cancel your credit cards, develop
a plan, etc… you are changing the way you live, and
especially the way you think. Following the steps mentioned above is
not a rule to follow. You must be convinced that you need to change the way you think. 

Saving
one dollar every day or any very small amount of money can be useful
for a rainy day or to help in your debts.

Always
pay off the smallest bills at first, this way you will save some money
and add it to the highest bill. This works in most cases when you have
for example 5 bills. You pay the small ones then allocate an extra payment
from the saved amount into the higher bill.

Again
and again, remind yourself, keep your credit card for
emergencies, do not carry the card with you, and have cash in your
pocket unless you really and urgently need it. Get out of troubles, and
put your credit card at home. Hide it somewhere out of sight. 

Remember; the credit card business is very competitive.
When you always make your payments on time, call and ask to lower your
interest, it is your right to do so.

Nowadays, everyone carries a mobile phone or a PDA (Personal digital
assistant) or a pocket PC. Carry them with you all the time, and record
your purchases whether by writing a note or downloading a free or paid
financial management software, it wont cost you more then 30 bucks. If
you are only using notes, write down the amount and what it was for.
That way you can really see how much you are frittering away each
month. This is the best way, to keep records of your financial life in
your pocket every time and everywhere.

It would be better to carry your PDA or small notebook rather then your
credit card(s). When you need to buy something take a look at your
notes, and see your total debt or purchases and the budget that you can
really work with. You do not really need to buy an item unless you really cannot live without it. In most cases, you
spend money for something with less priority while you can save this
money for something with higher priority or to pay existing debts.

Always
make a monthly budget for yourself, if possible do it weekly or even
daily; being financially organized is the key to success. You must
include details in your budget. Add foods, bills, entertainment,
transportation, shopping, miscellaneous and other and this way you will
see how much you really need to spend and which is higher in
priority… If you can make changes to your way of life and
save some money, do so. Use that money to pay back debts and in the
meantime you should stop adding to your borrowing by surviving only on
cash or debit cards

Are you
a student? An employee? Bring everything with you to school/university
or to work. Have your lunch, snacks and even your drink. It is better
then buying from machine. You will save even with small amount but you
are SAVING.

For
example, you can save between 1 and 3 dollars every day if you avoid
using machines, this way you have around 60 dollars each month
saved. 

Instead
of saying that something only costs one dollar, say if I don't buy it
that is one dollar that I can put away for a rainy day or put toward
debt.

Look at
your monthly income based on the net amount. Deduct taxes, health
plans, social security etc… and you will have the net income.









If you are in debt, it is a given that you are spending more money than
you make. You are in the red. This is something you must recognise.

Live
within your means. If you can't afford to pay cash, you can't afford to
have it. Also pay off highest interest debts first.

Usually,
when you have less free time, you spend less money on nights out or
shopping. When you are in debt, do not go out for shopping or for
entertainment until you are managing your financial life the good way.
Find something beneficial to do with yourself rather than going to the
mall. This way, you're reducing your debt, and most importantly, not
adding more to your debt. If you cannot keep up, you may enter a debt
consolidation program. Do not ever work with private firms or lawyers
with these issues. There are plenty of non-profit agencies who are glad
and ready to help you anytime by negotiating maybe a lower interest
rates or helping you with plans on improving you financial situation.

Even
though you may not like to have a third party agency help you get our
of trouble, remember it is 100% better than bankruptcy and you will
have a debt-free life to look forward to.

Take
this advice from someone who work in the credit card industry; pay your
bill every single month, whether you have a due payment or not. Look at
your overdue period and what your over limit fees are. You could be
racking up monthly fees which are added to your principal balance
and are then charged interest on the next month.

If
you're a real shopaholic, go to the thrift stores. They are often
charity run and often don't take credit cards, so you have to pay cash.
Keep you living within your means and you can find great stuff there.
Go to garage sales in well-heeled neighborhoods. Go early for the best stuff. You can
get great items if you keep your eyes open. Would you rather have a big
credit card bill you can't pay or a few scuffs on furniture or
appliances that has lots of life left?

It's a
real high to find the things you need and still stay out of debt.

Be
honest with yourself, this way you are on the road to freedom. Ask
yourself how this happened to me and why it happened.




You will need to really assess all the debts. Look at all your
statements. Cut up and cancel all the cards and accounts, except the
ones with the highest remaining credit available.

You
should keep one account open for an emergency; we are not saying that
you must live without a credit card.

To get
rid of debt stress, you will have to give up many things you
consider as needs. Believe it you can live without new clothes for awhile,
without buying the latest smart phone, the cable TV, the higher
bandwidth internet connection, and much more, believe it or not. You
have to face the responsibility and the consequences.

Luxury
items and things you want will be more valuable to you, when you really
can afford them with cash up front, or using credit in a wise way.

If you
are an employee, be willing to work overtime, get a part-time home job
or something similar, there are plenty of websites that offer home job
opportunities. Getting a better income will help you to get out of debt.
When you are free, take an hour just to think, try to have
new fresh ideas that might help you in improving your income and/or
reducing your expenses. Search and research. For example you can buy the
same item at 30% less by just shopping around at different stores. 

Do not
be fooled by brand names, an xyz mouse for your computer will work as
well as an xyz2 mouse. It is a mouse! Why do you need to spend double
the price for a brand name!

When you
have an identical item with different brand names and both with a 2
year guarantee, do not look for the brand name,
look for the cheapest. There are many  ways to save! All you need
is a little effort and some patience. So go ahead search and save!

If you
can buy directly from the factory do it, stores are buying from
resellers and resellers from the factory so the retail prices are double or
triple the factory cost at times.

When
your debts are high and your monthly income is not enough to cover the
payments, there are ways to solve your debt problem. But the road to
financial recovery takes a total commitment. You must decide you want
to be debt-free. You have to discipline yourself to take the necessary
action to pay back your debts. Only you can determine if you are
willing to make the necessary sacrifices to achieve this goal.

Finally,
it is inadvisable to take out new loans to pay off old ones. So-called
consolidation loans are often offered at very high interest rates,
quite often all they do is saddle people with new debts they can ill
afford.

***Note: This article is from a website that was recently merged into this site and may not represent the views of the sites owner. ***


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