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Have you succumbed to the lure of credit cards and found yourself in a bit of a pickle because of it?

Pull up a chair and have a seat – Welcome to the ever growing club of consumer debt. Your biggest challenge now is to dig yourself out of this situation and avoid having to pay anyone to help you do it.

The options at this stage are usually as follow (depending on the level of credit card debt):

Consolidate into a loan.
Debt Management.
Bankruptcy.
Do Nothing.
Just pay off the cards over as long as it takes.
Make the minimum payments and keep spending.
Make an effective DIY plan.

The more popular solutions – such as consolidation loans and debt management -we see being touted everywhere are the ones that put your money in other peoples pocket. I dont know about you but for me becoming free from debt should not involve spending more money, or *borrowing your way out of debt*.

So how does a DIY system work?

To break it down into 5 steps it looks something like this:

1. Address your spending habits and why you are in this situation.

To ever win with money and have a comfortable financial future you have to control your money not the other way round. Take complete control and set yourself some realistic yet desirable goals for the future.

2. Know your options, the ins and outs of how they work and why they are not for you.

Along the way you will be tempted by quick fix make it all better solutions like consolidation loans and debt management. As mentioned already there is a multibillion dollar industry making a very healthy profit from consumer debt. Your DIY plan does not involve *paying to get out of debt*.

3. Know your situation.

Any debt relief system requires a bit of budgeting. As long youve followed the rest of the plan so far, have desirable goals and no intention of taking an easy -and expensive way out you wont have trouble budgeting.

The other thing to know is your credit score. There are a staggering amount of mistakes found on credit scores that result in people paying more interest than they should. If you are eligible for lower rates and 0% APR cards to move expensive balances on to you need to know about it.

4. Minimise outgoings, Maximise income and leverage your cash flow.

If you could be paying less for utilities and day to day expenses you should. There is a very fine art of money saving that you will become very good at if youre going to be successful at this.

Home economics, consumer education and bargain hunting can save you incredible amounts of cash that can go toward paying off your debt quicker.

If youre really serious you can take it a step further and create a secondary source of income. Be it a second job, or using a natural skill/strength you have that can earn you money in your spare time.

With the opportunities available online its never been easier to find those who are seeking out some knowledge, experience and skills that you have and that they would pay you money for.

5. Form your system and put it into action.

Having followed the first 4 steps and laid some sturdy foundations you are now in a position to develop a quite powerful snowball plan. That is a system that gains momentum as you execute it.

This step is completely dependant on the first 4 steps and generating an extra figure that you can assign to snowballing your credit card debt. As the debts get paid off the figure grows and subsequently clears the rest of the debts a lot quicker saving you a tidy amount of interest in the process.

It is very possible use a DIY plan and enjoy great success from it, yes it takes a bit of hard work and discipline on your part but the alternatives just cost you more and keep you in debt for longer.

Its your money, its your life if you want to truly own them both then you have to take control not give it over to someone else. Control or be controlled, the choice is yours.

Still, credit cards are a fact of 21st century life, and it only makes sense to understand how to use them wisely. While it’s probably impractical to keep all plastic out of your wallet, it is prudent to limit the number of cards you have, and, of course, to pay all balances in full every month. Indeed, having only a traditional American Express card, which doesn’t allow you to carry a balance, can be an excellent way to impose fiscal discipline on you and your family-although, as the Visa ads point out, not everyone accepts American Express. For the rest of us, who do occasionally dabble in credit-card debt, here are a few ways to keep your habit under control.

1. Take advantage of frequent-flier programs tied to credit cards, but keep in mind that interest payments on a high balance can quickly turn “free” flights into outrageously expensive ones. At a dollar per mile, running up a debt of 25,000 may get you a plane ticket, but it will also saddle you with $4,500 in yearly interest payments, assuming an 18% annual rate.

2. Look very closely at credit-card offers before you bite. Obviously, most of those 2.99% and 3.99% rates will be in effect for only a few months. But there may be other catches as well. Making a late payment, even if it arrives only a day after it was due, may immediately trigger a permanent rate hike. Also, low initial rates sometimes apply only to transferred balances, and you could get charged a fee for making the transfer. Check, too, to see whether there is an annual fee, or charges for exceeding your credit limit or even for closing an account.

3. Avoid amazing grace-period tricks. What you’re looking for is a provision that says you’ll never be charged interest as long as you pay your bill in full by the due date. But some cards have no grace period, calculating interest from the moment you make a purchase, while others give you only a limited time after making a charge before interest is imposed. That period of 20 days or so may end before your payment is due.

4. Don’t forget to cancel cards you no longer use. If you don’t, they’ll show up on credit reports, and that could be a problem, particularly if you’re applying for a home mortgage. Your would-be lender may be reluctant to make a loan to someone who has a cumulative credit-card limit of $50,000, $100,000, or even more.

With Consumer Debt at a National high, many Americans are faced with increasing credit card interest rates, minimum monthly payments, etc. It is becoming harder and harder to meet our monthly obligations each month and many consumers are looking for answers.
This article will give you a brief run-down of the options that are available today to help make the decision a little easier.

The first option is to keep doing what you are doing now. Make your monthly minimum payments, pay increasingly high COMPOUND interest and lose thousands of dollars over the course of several years doing so. According to Bankrate.com, the average household has approx. $30K in unsecured debt. Did you know that paying the minimum monthly payments will cost you $112K in interest and it will take you approx. 59 years, yes you heard correctly, YEARS to pay off? That is a definite financial choice that will put you in the poor house quicker than anything else. When you are paying interest like this, it does not even benefit you to save your money in a savings account, because the interest would not gain fast enough to offset the interest you are paying on your credit cards. So, what should you do? Consider the other options!

The next option is a Debt Consolidation. This is a generic term now being used but true debt consolidation is taking your current debt load and rolling it into a new loan, with interest over a longer period of time. You will either need some security like a home or bank account. You will pay interest that is non-compounded, which is definitely better than compound interest; however, you will spread your debt over a longer period of time and therefore shell out more cash than necessary. If you have a small debt load, under $10,000, This may be a good option for you if you dedicate yourself to making larger monthly payments than are required, paying off early if possible.

Another option is Consumer Credit Counseling . You will recognize these companies because they usually have a non-profit status. They are actually sponsored by the credit card companies themselves and they have what is called a fair share arrangement, meaning the credit card companies pay these companies to keep you paying them. Your money is not dispersed into an escrow account, but the cccs companies disperse it evenly amongst your creditors how they see fit. You will not experience any relief from your monthly payment since they will stay pretty much the same. Interest rates are lowered most often, but are not completely eliminated. I have heard many complaints that payments are skipped and facts show that most enrollees in this type of program quit after the first 12-24 months. The reason being is that your credit report is negatively affected closely to that of a bankruptcy. When lenders and loan companies see an account managed by CCCS, they view it the SAME as a BANKRUPTCY. These types of programs usually take about 5-7 years to complete. Once the program is completed, the creditors release comments about CCCS on your credit report. To Sum it up, you have no monthly savings relief, you still pay your entire debt plus interest and your credit is negatively impacted for 5-7 years.

The last option I will outline is Debt Settlement. This type of program is becoming increasingly popular because of its many benefits to consumers. Debt Settlement Companies are experts at negotiating your debt down, on average for all cards/accounts, to 40% to 70% of what you owe. One card may settle at 80%, even 100% in some cases, the next card could be 30%. The end result is an overall total average of 40% to 70% of all the cards. This will be based on who your creditors are and their criteria. Creditors are directed to speak only to Certified Debt Mediators once enrolled and the process begins. Enrollees are set up on monthly payment plans, usually at a savings of 50% out of pocket providing immediate cash flow. You will be set up with one monthly savings amount, which will be deposited into a secured trust account at a Bank. Savings amounts are YOUR money. Settlement Companies have no access to it, beyond their fees, and neither do the creditors. It is a secure, protected trust account. This is the money, as it accumulates, that will be used to settle your debts. The consumer will have control of their own funds throughout the whole process. The average time a consumer is in the program is 12-36 months. During this time, the creditors will be reporting late pays on the consumer’s credit report while this process is going on. As settlements are reached with each creditor, the creditors will report a settled in full, paid with a zero balance. So, ultimately, at the end of the program, then your debt to income ratio will have improved and your credit will begin to heal itself for the future. In addition, you will not have the long term effect of a public record as you would with a bankruptcy.
Debt Settlement Companies do charge fees for their service, because creditors are not in alliance with DSC’s and do not give them kick backs for payments like in Consumer Credit Counseling programs. The fees average 15%-18% depending on which company you choose and the quality of service they provide. Most established firms will offer an online back office in which you can track your payments and settlement activities. Often times, fees are looked at in a negative light. But if you actually do the math, the savings still add up to substantial amounts and your credit gets back in shape pretty quickly. For instance, for $30K in debt and fees at 15% or $4500.00, you will still have an average savings of approx. $10,500. That is nothing to sneeze at! If your credit is a concern, then you must weigh your priorities.

Becoming debt free will give you many more advantages in your long term financial path, then two years with some late marks on your credit report. You may even consider credit repair after you are out of this type of program.

Not a happy picture but as bleak as that sounds running won’t change it but knowledge may and so, let’s take a quick snapshot at a few of the current credit card debt statistics facing so many Americans today.

The American Consumer spends over 1 trillion (that’s a 1 with 12 zeros) per year on credit card purchases. Not a big deal in and of itself but the problem lies in that they end up carrying over and paying interest on about half that amount or $500 billion. This translates into a balance of between $5,000 and $8,000 per family, with about $1,000 per year going just to pay the interest.

That’s just the average – many people owe much, much more!

Excessive Debt Costs Everyone Money
Many American receive at least one new credit card offer in the mail every day. The money being spent to service the debt industry is truly immense. Billions are spent administering, calculating and marketing the various aspects of the credit card industry.

Few industries or people escape unscathed, at least in the long run by debt. The burden that bankruptcy puts on the court system or the cost to government of providing subsidized debt counseling, are just a few examples of how debt effects the nation. In addition, consumers with excessive debt have less to spend and when money isn’t flowing, it hurts the economy.

Whatever Happened to Saving?
Debt is becoming increasingly more common. Not long ago, even a little debt was considered to be absolutely unacceptable. When you wanted something, you saved up for it and bought it ONLY after you had enough money to actually pay for it. And, if you had less than perfect credit, you couldn’t even get a credit card. Look at consumer debt figures as little as 50 years ago and they were absurdly low – the way most of the non-Western world is today.

The reasons are many and everyone has an opinion but regardless of the reasons, the art of saving, at least in the “western world” seems to have been lost. Outside of a 401K or similar vehicle offered at your place of employment, virtually nobody is saving enough for retirement. Banks are starting to have to offer ever-higher interest rates to get people to put money anywhere near a savings account. In fact, few people even have a savings account anymore. Most people have a checking account and that’s it. Our society and progressed into a “now” culture and the virtues of patience that help grow this country seem to have been lost. Whatever it takes to live life in the present with little regard for the future, appears to be the prevailing sentiment.

Is Over Spending the Culprit?
Ok, I’ve been a bit harsh up until now but I don’t want to give the impression that the only reason you’re in debt is because you continuously and frivolously overspend. Other factors are involved.

Truth be told, many people get buried in debt because of the loss of a job or an illness and they use credit cards to pay for basic expenses. As a result, they fall into the downward interest trap spiral as their debt grows out of control from just a few thousand dollars initially borrowed to pay for essentials.

Most people do have a reasonable sense of what they can afford and they don’t just go out and use credit cards to buy any and everything. Getting heavily into debt is usually a combination of many factors but the problem lies in people leaving balances on their credit cards for too long and not realizing just how deadly compounding interest really is to their financial well-being.

Debt has become an integral part of our modern lifestyle. As we keep on spending we find ourselves swimming in the pool of debt. But before we proceed , did u know that, An article in The Independent on Sunday recently put the growing consumer debt burden within the UK at 1 Billion.UK residents seem to enjoy a strange relationship with debts. While they cannot do with a large debt load over their shoulders, they also cannot do without incurring them for long. Britishers are sure to rank highly when it comes to spending , often results in financial crisis.

Debt Management UK helps you to manage your funds and also protects you from the humiliation of debt struck conditions.Debt management UK is a set of techniques and processes through which an attempt is made to give a break to the reign of debts.Debt management UK is just a simple common sense method, which involves some proven steps to take care of debts in a more systematic way. Debt management UK aims to strike at the roots of debt, instead of simply countering the after effects of debts. When debts are not allowed to increase, the use of debt consolidation loans and other short-term debt management techniques like debt counseling become redundant. Debt management UK is controling and managing debt responsibly by reducing or eliminating debt and create a cash flow that keeps you out of debt. To completely control your debt you need to make a budget, reduce expenses and focus on paying debt this is the essence of debt management UK . Debt management UK requires that you keep good records and stick to your budget so debt doesn’t get out of control.Try to cut expenses and remember to always live within your means. Debt management UK is open to all:good credit people, bad credit people or people with bankruptcy,

There are various tools available for debt management UK .Debt management UK on a smaller scale is known as debt counselling.It involves various debt management techniques-expenditure should be restricted proportionately to the income. Debt management UK technique includes non formal negotiation with lenders to get your interest rates lowered, late payment penalties cancelled or suspended, and you loan may be extended so you have longer to pay it off. If there is shortage of funds at the borrowers end and he is simply not in a position to pay, then discuss it with the lender. Ask the lender for the payment options,If the situation is very tight, the borrower can explain it to the lender and he will be more than willing to help, since he is interested in recovering his amount. This will help a lot in avoiding any late payment penalties.

Another important tool for debt management UK is debt consolidation,this loan helps in consolidating the existing debts of borrower to one loan making the repayments affordable by lowering the interest rates and more manageable. another techinques for debt management UK are : debt consolidation mortgages that includes certain debts in an existing mortgage. the advantage of this method is that debts are settled at the rate of a mortgage. Home equity loans put a convenient method of debt management UK .Since home equity loan is secured, it provides cheaper finance. Whatever be the method of debt management adopted, it must be effective towards debts. The ultimate aim of debt management must be to find a long lasting solution for debts.

Debt management processes in UK are similar to those followed all over the world.A sincere effort at debt management in UK will essentially involve keeping ones finances under control, taking the right debt from the right lender, never missing any installments, avoiding any late fees and if needed, consolidating the debt in the most efficient way.

A loan to consolidate debt can backfire by pulling one down into a larger burden of debt instead of completely alleviating it. For example, the loans are almost always advertised as having low interest rates and attractive package perks which stimulates the instant gratification seekers to sign up instantly. So, what happens when someone really doesnt read the fine print and doesnt shop beyond the sparkly television commercials? Well, simply put, those people often end up with not very competitive interest rates and worse customer service than they would had they shopped around for the best buy.

Debt Consolidation Loans, while they offer a great premise — multiple bills put into one consolidation loan with one monthly payment at a better interest rate — do have a few negatives as well. One is that people abuse them so instead of paying off their loans, they take out a perpetual consolidation loan which ends up costing more in long-term interest.

Another big downside to debt consolidation loans comes in the form of creating the appearance of everything is under control so the consumer returns to old bad habits of spending too much and accruing debts. Just because there is more disposable income coming back into the home doesnt mean it should be instantly spent on more consumer debt, yet often times that is exactly what happens. Then, eventually, a new debt management tool is needed to clear up the new charges and the lingering original consolidation loan balance. It becomes a real catch-22.

So, when considering a debt consolidation loan, take care to shop around for the best possible loan program and consider credit counseling to help you become more aware of how personal spending habits can affect the ultimate success of the loan as a spending solution.

What are Debt Management Services?

Debt management services are agencies that assist consumers in their endeavor to become debt free. There are two types of debt management services. These include agencies that charge a monthly fee for their services, and non-profit agencies. To avoid scams and fraudulent companies, it may be wise to select a non-profit agency.

The main goal of debt management services is to reduce your debts and put you on the path toward becoming debt free. To accomplish this goal, a representative from the agency will request information about your creditors and debt amounts. Once you submit this information, the representative assigned to your account will contact each creditor. Through negotiating, the agency will be able to get late fees waived and interest rates reduced.

After the debt management service and your creditors reach an agreement, the agency will lump all your debt into a single loan. Your existing credit accounts will be temporary frozen; thus, you are unable to acquire additional debt. If you decide to no longer use the debt management service, your accounts are unfrozen. Each month, payment is sent to the debt management agency, and not your existing creditors.

How to Choose an Online Debt Management Service?

Research and compare services before selecting a debt management agency. The internet is a valuable resource for finding information on various programs. Each program is different. Some programs require a minimum or maximum debt amount. Furthermore, other programs solely work with individuals who have several missed or late payments.

When comparing different debt management services, request quotes that include detail information pertaining to estimated payoff dates and monthly payments.

While its true that the average American owes $9,000 in credit card debt, its also true that many people owe a great deal more than this. Unfortunately, if you find yourself in a situation where your credit card debt is through the roof and your interest rates are hovering above 20%, its not likely that you can realistically pay it off in less than 40 years if youre just making the minimum monthly payments.

For instance, if the amount of credit card debt you owe is $50,000, at an average interest rate of 24.99%, it will take you exactly 41 years and two months to completely eliminate your credit card debt. And it gets worse the total you will end up paying at the end of 41 years is a staggering $102,129, with more than half of this amount going toward interest.

Even putting yourself on a five-year plan will end up costing you. You see, if you can afford to pay $1,437.34 each month, youll end up paying a total of $86,240, with $36,240 of that going toward interest.

To avoid this trap its important to review other options to eliminate your debt. If you have sufficient equity in your home you may qualify for a low-interest home equity loan. If youre struggling to pay your bills each month, you might want to expand your options to consider consumer credit counseling, debt settlement or even bankruptcy.

No matter what your current situation, if you owe a significant amount of money on high interest credit cards its highly recommended that you choose an alternative to continually paying the minimum required payments, as this path will only lead you to several more years of high debt and payments.