However, there’s a change of plan now! @.@

Even though the small emergency fund has reached its RM10,000 and the big emergency fund has been 56% towards the goal, hubby’s 50% salary cut and uncertain online income of mine have made me think twice.

Finally, a decision has been made, that’s throwing the extra money into the big emergency fund account until it reaches RM10,000.

Once it reaches RM10,000, I will keep rolling a certain amount each month into my small emergency fund savings account.

Once that certain amount of money is enough to pay off a small credit card debt, I will pull that cash out and pay off the debt.

In this volatile economy and situation, I think having more cash in savings account is safer than having lower debt. In other words, having a debt snowball savings account brings more security.

So, reaching the RM10,000 goal for the big emergency fund account and then turning the small emergency fund account into a debt snowball savings account!

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?

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.

There were several reasons why I enrolled in a debt management programme and not debt consolidation or debt settlement. Debt settlement? I wonder if there is any debt settlement plan in my country.

First and foremost, it’s FREE to join the AKPK debt management plan. You are not charged any enrollment fee or monthly service fee. Yes, the DMP provided by AKPK (Agensi Kaunseling Dan Pengurusan Kredit) is free; it comes with zero enrollment fee or monthly service charge.

Since the program is free to join and at that time I had had enough of my piled up credit card debt, I made an appointment with a senior credit counselor in Ipoh branch.

Did I do any DIY debt management to get rid of credit card debt? Of course, I did. In fact, I began budgeting and cutting spending starting April 2007 to pay down my credit card debt before finally signing up with the AKPK program.

In a span of almost one and a half year, I managed to pay down my debt from RM63,809 ($18,000 plus) to RM40,344.

Just as I thought I could slowly pay off my credit card through budgeting and cutting back on spending, bad things crept in one by one.

Firstly, hubby and I were not able to generate more income to pay the bills. Money was always not enough when it came to making payments to credit cards, home and car loans, utility bills and personal expenses.

We started being in late in payments or skipping some of the credit card minimum payments. As a result, late payment fees, penalty charges, over-limit fees, and other miscellaneous fees began piling up and added to my already piled up credit card debt.

One day after watching the AKPK’s TV commercial ad, I decided to pay a visit to the agency and enroll in its debt repayment plan to help me get out of credit card debt without stress.

There were a few reasons why I signed up a debt management plan and not any debt consolidation or debt settlement.

First off, the debt repayment plan I enrolled in is FREE. There is no initial fee or monthly service fee charged by the credit counseling and debt management agency.

Yes, it’s a free debt management program that is only available in my country. It’s not available to people in the US, UK, Canada and other countries.

As it’s a free debt relief program and I had come to a point that I couldn’t go on paying the huge amount of minimum payments, I decided to enroll in the debt management program.

But why didn’t I DIY debt management to pay off the credit card debt?

Oh, I did. In April 2007, I started self-help debt reduction to pay down some of my credit card debt before I joined the DMP. Between April 2007 and August 2008, I managed to bring down my credit card debt from RM63,809 ($18,000 in USD) to RM40,334.

Just as I thought my effort of tackling my credit card debt would pay off if I kept on budgeting and curbing my spending habits, bad things kept popping up.

First of all, the expenses always surpassed the income. Due to economy downturn, hubby and I were not making sufficient money to pay all the credit card minimum payments, car and home loan installments, utility bills and daily expenses.

When we failed to make payments on time, you know what will come next, right? Yup, banks and creditors started charging late payment fees, over the limit charges, cash advance fees, retail interest charges into my credit card accounts.

One day in August 2008, I told hubby that I had had enough of my credit card debt, non-stop phone calls from banks and warning notices issued by creditors. I wanted to get rid of them.

So, I am now in the free debt management program.

At first, it was very difficult for me to control every cent and dollar and stick to a budget. I was so used to spending money like water all these years, so logically speaking, I really needed time to change my spending habits.

Fortunately as time went by, the habit of limiting my spending seemed to develop and work automatically.

If you are in debt and hoping not to end up in a debt management program, then you have to start cutting back on your spending and sticking to a budget by trying a few practical changes that you can make everyday.

You’ll be amazed that you can actually cut your spending more than you expect by simply making some minor changes.

1. Pack Your Lunch Every Day. Having lunch at restaurants or food courts is definitely more expensive than bringing your own lunch.

By bringing your own lunch, you can save several dollars every day, which will add up over time.

2. Use Your Cell Phone During Off Peak Hours. Are you one of those people who spend a couple hundred dollars a month on phone charges? If so, lower your phone charges by making most of your calls during off peak times.

Check with your service and plan to find out when you have cheaper or unlimited calls.

3. Start Clipping the Sunday Newspaper Coupons. Stop throwing away your Sunday newspapers, what a waste! Instead, skim through the advertisements for coupons and sales.

Although the process of clipping coupons is tedious, the savings are often worth it due to the fact that more and more stores double or triple the amount of their coupons.

This technique can save you up to 20 or 30 dollars each time you head to the food store.

To be honest, I used to sneer at the idea of cutting back on spending that saved a dollar here and there. How could saving a dollar here and a dollar there help me pay off credit card debt?

Well, the truth is a dollar here and there really adds up in long run. Changing your spending habits does save you much money.

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.

I had to resort to joining a free debt management program after failing to see much decrease in my credit card debt. Month after month I threw in chunks of my hard-earned money into making the minimum payments, yet the total credit card debt didn’t seem to drop much.

Was it because I kept adding new credit card debt to my outstanding balance? Noop. It’s because of late payment fees, over-limit charges, cash advance fees, retail interest charges, and miscellaneous fee charges that kept being added into my total debt.

Scary, right? To avoid letting these horrendous fees imposed by banks and credit card companies drags you into a deep debt hole, you need debt management tips to help you get out of debt fast.

1. Credit Counseling. Seek help from a certified credit counselor who can help you navigate through your debt dilemma.

You can either opt for a non-profit credit counseling agency or a for-profit credit counseling company when it comes to credit counseling. The difference is that the former provides free counseling and charges a nominal monthly fee if you decide to enroll in a debt relief program while the latter charges quite exorbitant fees.

2. Debt Consolidation Loan. You should only consider a debt consolidation loan if you are not able to replace your high interest credit cards with one, low interest rate credit card. This is because you may have to pay for an application fee for a debt consolidation loan, whereas with a credit card you would not.

3. Home Refinancing. Refinancing your mortgage allows you to save hundreds of dollars per month on mortgage payments. With lower mortgage payments, the money saved could be used to pay off your credit card debt.

4. Home Equity Loan. Alternately to home refinancing, you may have enough equity in your home to cash out and pay off your debt. Most importantly, credit card debt is not tax deductible, but a home equity loan is. This means you can reduce your debt as well as reduce your tax obligation by cashing out.

See, you have some viable solutions to help you get out of debt fast without resorting to any debt management program, debt settlement plan or bankruptcy that damages your credit score.

According to financial experts, you probably do not need any debt consolidation or debt management if you are able to make your current payments and have reasonable interest rates.

However, if you are suffering from so much unmanageable debt that you are unable to make ends meet and make even the minimum payments, then there is a need for you to really consider if a debt consolidation loan or a debt management program is right for you.

What’s the difference between a debt consolidation loan and a debt management plan?

Debt Consolidation. Debt consolidation is a process where all your multiple debts and loans like credit cards, car loans and other high-interest debts are lumped into a loan with one monthly payment with lower interest rate. With reduced monthly payment and interest rate, you can pay off your credit card debt faster.

The catch is such loan requires that you own a house, so that the loan can be taken against equity in the home. There are risks involved with putting your house up for collateral on a debt consolidation loan.

If unfortunately something unexpected happens to your income and you find that you can’t make the proposed loan payment, you could lose your house.

This is one of the major reasons why I opted for a debt management program rather than debt consolidation.

Debt Management Program. During a free consultation, a certified credit counselor will only recommend a debt management program after going over your income and expenses and finding that credit counseling is not enough to bring your financial back to a manageable level.

If it is determined that a DMP is right for your, the credit counselor will negotiate with all your unsecured creditors to obtain the lowest monthly obligation that satisfies all your current accounts.

Being put in a debt management program means that you make only ONE payment with reduced interest rate to One credit counseling agency on One due date; you no longer have to be stressed by paying multiple credit card payments to various banks on different due dates.

Most important of all, all late payment fees and over-limit charges are waived once you are in a debt repayment plan. No more harassing phone calls from banks, warning notices from creditors and annoying visits by third party collection agencies.

No matter which debt relief program you choose, be it a debt consolidation loan or a debt management program, your ultimate goal is to pay off all your debt and bring your finances and credit score back to the right track.

To make sure that you don’t need any debt relief program or bankruptcy in future, start implementing debt management to properly manage your credit card debt.

Debt management is, simply put, a way of taking control of your debt and finances. You can manage the debt on your own with a little bit of effort without the help from a certified credit counselor.

The first step of debt management is to become familiar with your debt. Make a list of all your credit card accounts – how much is owed on each card and the amount of monthly payment.

Next, make a list of all your expenses and figure out where you can cut down and save money. There is also a need for you to keep track of your daily expenses so that you know where your money is going and see whether you can reduce the expenses in this area. Spending money without realizing what you are spending on and where your money is going to is the main reason you are knee deep in debt.

The next step is the most important and practical step – start making payments. Take the account with the smallest balance and pay as much as you can towards the balance each month while paying the minimum payments on all of your other accounts until the first account is paid off.

When the account is paid off, take the second lowest balance and repeat the process adding the amount that you paid towards the first account to the payment of the next account. You will repeat this process until you have all of your credit card accounts paid off.

Credit card debt management is not rocket science. It’s a simple process that requires discipline and determination in order to pay off credit card debt without having to enroll in a debt management program or declare bankruptcy.

In my opinion, people who don’t possess strong discipline and determination tend to end up enrolling themselves in debt management programs.

To be honest, I am a credit card debt woman who doesn’t have very strong discipline and determination. This explains why I am in need of a free debt management program to help me stop using credit cards totally and pay off my debt without harassment.