If you are really thinking that bankruptcy is your only debt relief option, you may/might be wrong.

As a woman who was once loaded with RM63,809 credit card debt in 2007 and later reduced the debt amount to RM40,000 in 2008, I had also thought of going bankruptcy.

The thought of filing bankruptcy rose when balance transfers, non-performing loans, short term loans and personal loans didn’t work to bring down the interest rates and outstanding amount much.

On the contrary, there were late payment fees, cash advance fees, retail charges, over-the-limit fees and other miscellaneous charges that kept adding new debt to the credit card debt.

I know how it feels to be under so much pressure from debt that you can’t even think straight. But believe me when I tell you that bankruptcy should be your last resort option.

I’m talking about no hope of ever getting out of debt after trying out balance transfers, non-performing loans, short term loans, personal loans, debt consolidation loans, debt management programs, and debt settlement plans.

One of the reasons that I didn’t opt for bankruptcy was because of the fact that I could pay off my credit card debt through a debt management programme offered by AKPK.

If you are a Malaysian and loaded with credit card debt, you may have known about AKPK by now.

Enrolling in AKPK’s debt management plan is another debt relief option that many Malaysians with credit card debt are seeking now. It’s a free debt management program that charges NO counseling fee, enrolment fee or monthly fee.

I am currently in AKPK debt management plan. In fact, I have been in the program for a year now.

Read my bumpy journey when applying for AKPK’s debt management program in 2008 if you think you need help from credit counseling and debt management program to help you pay off credit card debt.

A: Yes. You NO longer can use your credit cards; all your current and valid credit cards will be terminated once you are in the program.

Q. Is it true that no banks would approve my new credit card and loan applications?

A: Yes. As long as you are in the program and haven’t settled all your credit card debt, no banks would give you credit cards or loans.

Q: What about after I have successfully paid off my credit card debt?

A: Yes. You can apply for a credit card or loan again after your full settlement.

And judging from what I know about Malaysia’s banks, I am pretty sure that you can get a loan again and fast so long as you have CASH as down payment.

A good example was my car loan. It’s about 3 years ago. Of course, I was still able to manage my credit card debt at that time and never heard of AKPK.

The bank officer that was in charge of approving my car loan kept telling me that my credit card payment records were far from satisfying and it’s kind of difficult for him to approve it.

Well, in the end he still approved the car. Why? I traded my old car and I could get back at least RM5,000. With RM5,000 paid as the down payment for the car, tell me, which bank would say no?

Q: I heard that my credit score will be damaged once I am in the AKPK debt management plan. Is it true?

A: Since you are thinking of visiting AKPK credit counseling agency, it’s my guess that you have already missed a few credit card payments or you have stopped making payments to banks, right? I am sure your credit report should have been tainted badly because of these missed payments, right?

So, does it matter much if your credit report is hurt a bit more by you being in the debt repayment program?

In fact, being in the program helps rebuild your credit rating. Your monthly repayment to the credit counseling and debt management agency shows that you make payment every month.

Judging from my experience with Malaysia’s banks, so long as you have CASH …   You know what I mean, right?

Q: You seem to say a lot of good things about AKPK. Do you earn a commission for each referral?

A: I HOPE AKPK pays me commissions for all the information and good stuff about AKPK mentioned by me.

Of course, NO.

Q: Then, why do you talk about AKPK all the time and recommend it to every Malaysian who is in credit card debt?

A: The reason is simple. I am sick of seeing people selling credit card debt reduction solutions to people like you and me who are so deeply in debt and desperately trying to find ways to get out of debt.

Thinking back, I should not blame people who sell the credit card debt solution info. It’s human being’s mentality that FREE info is not worthy; only PAID info is valuable.

What about you? Are you worried about your credit card debt?

You should be if your credit card debt has spiraled out of control; you pay more than 15% of your monthly income to your credit card bills or/and borrow cash from one credit card to pay another.

You are not the only one who is dealing with credit card debt nowadays. In fact, almost 40% of credit card holders are in the same predicament!

So what should you do to avoid the need of getting help from debt relief options such as debt consolidation, debt management program, or debt settlement and worst of all filing for bankruptcy?

Start doing credit card debt management to help yourself get out of debt as fast as possible!

Most financial experts will advise you to stop using your credit cards. Quit using credit cards is to prevent you from adding new debt to your existing outstanding balance.

If you have more than one credit card, pay the minimum payment on them all. Then, pay the most to the credit card with the highest APR. Once the card with the highest APR is paid off, keep paying the minimum payment to the rest of your cards and pay the most to the next highest APR. Do so until all the credit cards are paid off.

Another way to help you is try balance transfer deals that offer 0% interest free period for 6, 9 or 12 months to save some money.

Credit cards are convenient, but you don’t have to use them all the time and put everything from groceries to petrol to night’s-out on them. Instead of using credit cards, cultivate the habit of using cash to help yourself curb your spending habits and get into more credit card debt.

If you are really concerned about your credit card debt, start doing debt reduction before you end up resorting to debt consolidation, debt management plan, debt settlement or bankruptcy.

Once you have established your degree of need for debt help, the next step of your debt management program is to decide whether you will enroll in a debt management plan designed for you by a credit counseling agency or do it yourself debt management to achieve total debt free.

If you have made the decision to go debt free through a DMP offered by a credit counseling and debt management company, make sure you opt for a not-for-profit credit counseling agency that is of a member of the National Foundation of Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

It won’t be worth your time or effort to choose a debt management company that charges a large monthly fee for their services as your debt problems may get even worse.

By attending a credit counseling briefing, a certified credit counselor will let you know the debt relief solutions available for your situation.

If it is determined that you need a DMP to help you get out of debt, your credit counsellor will contact your creditors in an attempt to stop harassing telephone calls, lower your interest rates, lower your monthly payments, and perhaps stop late fees and over limit fees.

So a debt management program is created to help reduce your overall monthly debt, help you save on interest fees, and improve your credit rating by paying creditors on time.

Take note, though. Before signing a debt management plan contract, make sure the written agreement detailing all the services discussed and the exact costs you will have to pay.

Whether your aim is to restructure your multiple debts into one affordable monthly payment, pay off all your bills sooner than before, avoid late charges, put an end to harassing phone calls from your creditors, save thousands of dollars in interest, lower your monthly payments substantially or avoid bankruptcy, you can achieve it with a debt management plan.

Overall, we spent less than RM100 on food, shampoo, toothpaste, parking fees and discounted trousers during the trip. Unbelievable, right?

You see, hubby’s meals and seminar, petrol and accommodation fees were all fully paid by his school while my accommodation and meals at my uncle’s house were free.

Whenever I went out with my uncle’s family or my sisters, they were the ones who insisted on making payments.

My younger sister who knew my financial woes better kept buying foods and clothes for me. Of course, she paid cash. I am happy that she loves using cash, not credit cards.

I only realize the power of using cash after I was so deeply in credit card debt and had to sign up with a free debt management program called AKPK debt management programme (DMP) in my country.

I am grateful that I was approved of the debt repayment application last October and given a chance to bring my financial ruin back on track without having to declare bankruptcy.

Use cash, if you don’t want to end up in a debt management program to help you get out of credit card debt.

Use cash so that you don’t have to pay high interest rates, late payment fees, over-limit charges and other miscellaneous fees. And most important of all, you don’t have to pay interest on the interest charges you owe!

Had it not been the option of enrolling in a free debt management program, I would have filed for bankruptcy in 2008.

If you are a new credit card holder, you need to keep in mind that the real cause of your financial mess is you. Make sure you don’t put your blame on the credit cards and the credit card companies when your credit card debt is out of control.

One shopping spree does not usually cause high debt. It is usually a pattern that consists of gradually increasing purchases that add up to a large debt.

It’s fortunate that you are at the stage where your credit card debt is still under control. To make sure that you do not get into deep debt trouble is to start spending less than you make.

Spend Less Than You Make. It sounds simple, right? Well, it can be very difficult if you have a problem with willpower. It is important to stick with spending less than you make or you will find yourself in exactly the same place as I was before and had to resort to debt relief help option like debt management plan to get out of debt.

If you can summon enough willpower and strength towards your finances and spending, then you will find yourself the winner in the game of debt without the need of a debt management program.

As someone who has been there and done that, my advice is – If you don’t have the money to spend, then don’t spend it!

First, surf the net and do some research on the types of credit cards available on the market. By doing this, you can familiarize yourself with different credit card types and terms.

Balance transfer credit cards, low interest credit cards, cash back credit cards, reward points credit cards, retail rewards credit cards, travel points credit cards, gas rebate credit cards, home improvement rewards credit cards, airline mile credit cards, bad credit credit cards, business credit cards, student credit cards, and the list goes on.

Being a form of borrowing that involves charges, credit cards usually have underlying credit terms and conditions that affect your overall cost.

So, it’s best to compare terms and fees before you apply for a credit card and agree to open an account.

Some of the important terms to be understood well include the annual percentage rate or the APR. Being a measure of the cost of credit expressed as a yearly rate, make sure you know the APR rate before you apply for a credit card.

Aside from APR, you should also find out the periodic rate so you would have an idea of your outstanding balance and finance charge for each billing period.

Other important terms to know before you apply for a credit card are free period or grace period, annual fees, transaction fees and other charges, and balance computation method for the finance charge like average daily balance, adjusted balance, previous balance, and two-cycle balances.

I am not that type of person who is patient enough to research on all the credit card terms, that’s why I ended up in deep debt trouble and had to resort to enrolling in a free debt management program to get out of debt.

If you are also not that type of person who is patient enough to understand all the terms, you should at least get the card issuer to give an explanation how the balance is computed and it must appear on your monthly billing statements.

Once you are familiar with the types, terms and fees of all credit cards available on the market, your next step is compare numerous credit cards that would best serve your needs.

Different types of credit cards offer different options, depending on what your needs are. Some are geared toward individual consumers, while others are set up in ways that work best for small business needs.

And lastly, you may now apply for the right credit card of your choice by filling out a credit card application by visiting a bank representative or through online.

Often times, the term “credit counseling” is used in the same sentence as debt settlement, but actually, it’s a completely different process.

With credit counseling, you will actually work with a credit counselor to pay off your debt in smaller, monthly payments that you can afford.

So, do you really need credit counseling to get you out of debt? You need it if you have been receiving harassing phone calls from bill collectors or if you are unable to make another month’s high interest credit card payments.

Before you attend any credit counseling briefing, it’s important that you choose a good credit counseling agency so that you are not scammed.

Look for a reliable credit counseling agency that is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) or the National Foundation of Credit Counseling (NFCC).

Once you have identified the right credit counseling agency, you’ll have to meet with a certified credit counselor, and provide him with all of the details of your debt.

After a thorough review of your debt, credit history, and a detailed analysis of each of your creditor accounts, your credit counselor will let you know if there is a need for you to enroll in a debt management program.

Once it is determined that signing up with a debt management plan is right for you, your debt management program counselor will negotiate with all of your creditors to reduce interest rates, eliminate late payment fees and lower payments before creating an affordable debt repayment plan that you can live with.

It’s true that working with a credit counseling service can do some damage to your credit report. But if you are at the stage where your last resort is filing for bankruptcy, you would definitely consider a debt management plan in order to avoid bankruptcy or a report full of charge-offs.

Before you decide to sign up with any of the debt relief options, it’s important to have a thorough understanding of debt consolidation, debt management program or debt settlement plan so you can choose the option that best suits your needs to help you settle your debts.

Debt Consolidation. Debt consolidation comes in two forms; secured and unsecured.

Secured debt consolidation is the action of combining several loans or liabilities into one loan; it takes all of your high interest credit card debts and turns them into one low interest loan.

Often you have to be a home owner to qualify for a secured debt consolidation loan called home equity loan.

With a much lower interest rate than your credit card interest rates, secured debt consolidation enables you to pay on the principle and that thus helps you to eventually get yourself out of debt.

But a word of caution, though. A home equity loan is a secured loan; the bank can take away your house if you fail to make payments.

Debt Management. Credit counseling and debt management agencies, be it non-profit or for profit, work to help you learn to get control of your finance.

Through debt management, you are educated on how to make a budget and stick to it and often help you make a schedule to follow for paying off your debts.

If it is determined that credit counseling is not enough to help you get you out of debts, you will be recommended to enroll in a debt management program.

A debt management program, also known as debt management plan, restructures your multiple monthly payments into one monthly payment, and thus resulting in lowering the total monthly payment previously paid.

When a DMP is recommended, a certified credit counselor will be in charge of negotiating with your creditors to reduce interest rates, eliminate late fees and over-limit payments, and create a manageable repayment plan for you to follow.

A debt management plan is right for me, therefore I enrolled in a free debt management program available in my country last year. I have been in the program since October 2008.

Debt Settlement. Debt settlement is an approach to debt reduction in which the debt settlement company renegotiates the amount of debts you owe with your unsecured creditors and convince them to give up their demands for the full repayment of your debts and instead to accept a lesser amount.

See the difference between debt management and debt settlement clearly; debt management means paying a monthly payment while debt settlement means paying the whole amount up front.

In order for the debt settlement program to work, you have to have a large amount of money on hand for a one time sum. Inability to meet this requirement will probably end up with you getting calls from a collection agency and facing with even more debts.

Debt consolidation, debt management and debt settlement are often favorable debt relief options because they allow you to get out of debt faster without having to declare bankruptcy.

Here are a few simple debt management tips that you can use without having to go to an expensive financial counselor.

1. Cut Up All Your Credit Cards. This is the best way to stop adding new debt to your existing credit card debt. If you have no credit cards, there will be no more excuses such as keeping one card as ‘emergency card’.

Have you ever set aside a card with the lowest interest rate for emergency use? Is it really used for true emergencies or has it been maxed out already because of the best buy TV or deep discounted iPhone? If so, stop giving yourself any lame excuse to keep a card for ‘emergency purposes’.

2. Move Your Multiple Debts to a Lower APR Card. If you have multiple credit card payments, you may consider moving the higher APR multiple debts to one with a lower APR. This will lower the interest charges and help you get you out of debt faster.

3. Use Dave Ramsey’s Snowball Method. This Dave Ramsey Snowball Method has worked for many people and you should give it a try if you haven’t.

This is how it works: List each of your credit card debt, and the amount you are paying each month. Start tackling the card with the lowest amount first. Then use that money to start paying off the second lowest amount. And then the next and the next.

Confusing? Well, here is an example.

Let’s say you have a $7,000, $5,000, and $2,000 credit card with payments of $150, $125, and $100, you will finish paying off the $2,000 card first.

Once it is settled, you take that $100 and put it towards the $5,000 credit card. That means you are now paying $225 per month. You have increased your monthly payments which will pay off that credit card sooner and will have you paying a lot less in interest.

Once that is paid off, you apply the $225 to the $7,000 card, making your monthly payment $375. This will greatly speed up the payment of this card, reducing your interest payments even further.

When every card is paid off, you now have $375 per month extra to put towards savings, emergency funds or investments!

4. Consider Debt Consolidation. If you own a home, you may want to consider consolidating all your multiple debts using a home equity loan.

A home equity loan has a much lower interest rate than your credit card interest rates. The best part is that it’s tax deductible.

But a word of caution, though. A home loan is a secured loan; the bank can take away your house if you fail to make payments.

By following these 4 debt management tips, you can completely pay off your credit card debt without the need of enrolling a debt management program like I did or resorting to debt settlement plan or declaring bankruptcy.