Tag Archives: monthly payments

Use A Personal Loan Or Debt Management Program To Pay Credit Card Debt?

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Posted by Vedis the DMP Blogger on February 27, 2010 – 4:48 pm
Filed under Debt Management Companies, Debt Management Programs, Questions & Answers

Question: Should I use a personal loan or debt management program to pay off my credit card debt?

I have about $25,000 of debt but can still pay monthly payments on time and have never missed a payment.

If I try to get a personal loan as opposed to a debt management program, which looks better to creditors?? My credit score is around 650-670. I am thinking of going to a non-profit credit counseling agency to see what they think.

I still have some stocks and bonds totaling $6,000. I do get paid consistently and have been trying some internet surveys to make some small money on the side to my job.

What things should I look for at the credit counseling agency?

How To Get Out Of Debt Without Enrolling In A Debt Management Program?

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Posted by Vedis the DMP Blogger on August 1, 2009 – 10:57 am
Filed under Debt Consolidation Loans, Debt Management Programs, Debt Management Tips

Get Out Of DebtSo, you are drowning in unmanageable credit card debt. What are you going to do to get yourself out of debt without resorting to any debt management program or debt settlement or filing for 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.

If You Are In A Debt Management Program, Your Credit Score Will Be Badly Damaged

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Posted by Vedis the DMP Blogger on July 1, 2009 – 6:11 am
Filed under Debt Management Programs

Have you been told that your credit score will be badly damaged if you are in a debt management program? Well, I was told many many times about it and was advised to DIY debt management myself without the help of credit counseling agency so that my credit score wouldn’t get hurt.

At that time when I was thinking about getting out of credit card debt with a free debt management program, I was already a few months behind my monthly payments and wasn’t able to pay the minimum payments.

Not only were there non-stop phone calls and letters from banks and creditors, I started getting phone calls and visits from third party collection agencies!

If you had been in my shoes, would you have thought about credit score or cared if a a debt management program would damage your credit score?

I didn’t care. What I wanted to do at that time was to get into a shelter for a temporary relief; a credit counseling and debt management agency for a temporary financial relief.

I needed to enroll in a debt management program that could consolidate my multiple credit card payments into one payment and stop all the harassing phone calls, warning letters, third party collection agencies, exorbitant late payment fees and over-limit charges.

Since I was put in the free debt management program in October 2008, I have been able to heave a relief. Paying ONE smaller monthly payment to ONE credit counseling agency on ONE due date enables me to save more money for the emergency funds and pay my credit card debt without much stress.

It’s true that if you have loads of debt but are current on all your payments, your credit score may drop when you enter a debt management plan.

But if you have several late payments or are currently way behind on any credit payments, chances are a debt management repayment plan actually improve your score.

Enrolling in a debt management program is a long term decision, and the fact is repaying your debts is the best thing for your credit score.

The Benefits Of Free Debt Management Programs

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Posted by Vedis the DMP Blogger on April 13, 2009 – 5:03 pm
Filed under Debt Management Programs

DebtIsn’t it frustrating to see the amount you owe rarely decreases even though you are working very hard to make payments to your credit card debt? I understand your frustration as I had been like you before I enrolled myself in a debt free management program or DMP.

Being in a free debt management program enables me to regain my financial control, establish a budget, save for emergency fund and get myself out from under my debt without stress.

If credit card debt is a problem for you, you might want to start looking into debt management programs and learning more about the advantages of the programs to see whether or not they would help you get out from under the debt that you’ve accumulated.

Debt management programs, also called debt management plans, help you negotiate lower interest rates, get late or over-limit fees waived, work out a payment schedule that’s acceptable to you and to your creditors, and consolidate your monthly payments into one.

Each month after you make a regular deposit to the credit counseling agency’s collection account, in turn, they will forward payments on your behalf to your creditors.

Take note that some debt management companies do charge for their services, usually as a modest monthly fee while there are non-profit credit counseling agencies that provide free debt management programs.

Always do your research and pick the most reliable credit counseling agency before you commit to a debt management plan. There are simply too many debt management companies that are notorious for sending payments late and getting their clients into trouble with creditors.

To reduce your credit card debt and return you and your family to a higher quality of life without filing for bankruptcy, debt management programs are worth looking into.

Things To Know In Credit Card Debt Elimination

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Posted by Vedis the DMP Blogger on February 2, 2009 – 5:28 pm
Filed under Credit Card Debts, Credit Reports, Credit Score / Credit History, Debt Management Companies

Programs to eliminate credit card debt will be perfect for anyone who is having troubles managing their debt. Since there are a lot of credit card debt elimination programs, you should know each program. This will help you determine the best program that is suited for you.

1. You should set a timeline or determine the time when you can possibly pay off all your debts. Total the amount of all your debts and the monthly payments that you can give. This will give you at least an estimate on how long you will be paying off your debt.

2. Check to see if the company you are talking to will allow you to quit if an emergency situation comes into play. For sure you do not want to be tied up for many years in a single plan.

3. Try to find a program that will allow you to get hold of your money during emergency situations. There are agencies that will not allow you to get your money back. So as much as possible try and look for an agency that will give you your money during emergencies.

4. You should also find out how credit card debt elimination program can affect your credit score. Usually, most systems will give you a bad credit score so you should know how to counter this situation. Your FICO score will usually go down after any negative marks. So ask the agency on how you can get your FICO score raised.

5. Before you sign up with a credit card debt elimination agency, you should be knowledgeable about the fees that you are going to pay. Ask for a written contract and a breakdown on all the fees.

Since there are so many credit card debt elimination programs, make sure you spend some time doing research to pick the best credit card debt elimination program.

3 Easy Steps To Eliminate Credit Card Debt

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Posted by Vedis the DMP Blogger on January 8, 2009 – 10:05 pm
Filed under Credit Card Debts, Debt Management Companies, Debt Management Programs, Spending / Expenses

Eliminating credit card debt is the main concern of a lot of people, especially in times of weakening economy, looming recession and possible layoffs. Even though people burdened by tonnes of credit card debt are eager to do so, they fail to set goals and determine the steps they need to take.

If you are one of the debtors loaded with unmanageable credit card debt, there are different kinds of credit card debt elimination plans that you can apply.

Here are 3 easy steps to eliminate credit card debt:

1. Change Your Spending Habits. There are a lot of people who spend more than they can manage. This is the main problem when it comes to credit cards, they can buy all the things they want because they do not need to bring out cash. But when the time comes to pay the bill they do not have enough money to pay it.

So it will be helpful if you only use your credit card during emergency situations only. It will also help if you admit to yourself your mistakes. This way you know where to start.

2. Pay More Than the Amount Stated in the Credit Card Bill. During monthly payments, try to pay double or even triple the amount that is being asked. If it requires you to get an extra job then do so because for sure you do not want to have debts all your life.

3. Seek the Help of Debt Management Company. If your credit card debt becomes too impossible for you to handle then maybe it is time to seek the help of debt management company. Credit counselors will assist you all through out so you can eliminate credit card debt immediately.