Credit card debt relief plan

As stated previously, a plan is essential to recovery associated with credit card debt. Think of this as your bailout plan. When creating this plan, you must examine your current expenses as well as how you spend your money. This will require some record keeping, so it is important to establish a means of tracking where your money goes. Many individuals may use a ledger, and others may benefit from making an Excel document to track expenses. The choice is yours, but remember that the goal is to track where every penny goes so that you understand exactly how you are spending your money. By having this type of record, you will be able to discover ways to curb your expenses so that more money is invested into paying off credit card debt.

Emergency fund

When creating a plan to eliminate credit card debt, it is essential to ensure that you have a sufficient emergency fund set aside. Though putting all of your extra money into paying off your debts might sound logical, it could actually result in incurring future debts when you run into an emergency that requires fast cash. It is best to open a bank savings account for emergency funding. This way, you can also accumulate interest payments — which results in more money.

Life Insurance Policy

If you are interested in recovering from credit card debt, you should look into the life insurance policy that you have. If you find that you have one that is described as being “Whole Life,” you will also find that you have the option of borrowing some of the money that is considered to be the value of the policy. You could use some of that money to pay down some of your credit card balances. Once you get your financial affairs in order, you may pay back the loan from your life insurance, and repayments typically do not have any interest added to them.

Minimum monthly payments

As you know, when you have credit card debt you are expected to make a minimum monthly payment each month. While making the minimum payment will avoid incurring more interest and penalty fees, it is important that you consider making more than a minimum payment each month. You may simply live a bit below your means or cut back on something that is not considered to be a necessity. Doing so will ensure that you have extra money to pay more on your credit cards.

Live frugally, save energy, money

In order to save more money to put toward paying off your credit cards, it is important to learn how to live frugally. You must become an expert at making a penny go as far as possible. For example, instead of using a clothes dryer, you can use a clothesline to save electricity. You can conserve energy by unplugging items when not in use, using energy-efficient light bulbs and reducing the electricity you use overall. You can also grow your own food, make your own soap and use solar lights instead of lighting that requires electricity.

Additional streams of income

There are many ways to create additional streams of income. Creating additional income will provide you with more money to put into your emergency fund. More importantly, it can provide the money you need to put toward your debt. You could work overtime, get an additional job or learn ways to make money online. You can clean out your attic, closets and garage to find items to sell.

Buy used products

When making certain purchases, consider purchasing used products because they are usually cheaper than newer ones. Yard sales, thrift stores, flea markets and online websites such as Amazon and eBay are wonderful places to purchase used clothing, movies, games, electronics, jewelry and more. The money you save could be used for payments on your credit card.

Skip entertainment

If you enjoy entertainment products such as movies and books, you should look for more frugal ways to enjoy them. For example, if you enjoy reading, go to the library instead of the bookstore. If you enjoy watching television shows or movies, there are many websites that offer those shows for free. You should use these alternatives instead of renting movies or paying for cable services. Doing so will save you a tremendous amount of money that can be applied to credit card debt.

Walk instead of drive

If you live in an area that is close to stores and your job, you should consider walking or riding a bike instead of driving a vehicle. This can help save on car insurance, fuel and vehicle maintenance.

Credit card debt relief

As you can see, there are many different methods of creating more cash for credit card debt relief. By following the steps outlined in this guide, you can easily pay two to three times more than your minimum monthly credit card payment and eliminate that debt.

Advices for starters

For starters, you need to understand what credit card debt consolidation involves. Simply put, this service is a process that makes it possible for all credit card debt to be rolled into one debt. In other words, outstanding balances from multiple credit cards can be transferred to one new credit card or consolidated through a bank loan. Typically, credit cards with a high Annual Percentage Rate would be candidates for credit card debt consolidation and capable of rolling the balances to a card with a lower APR.

The other option is to take outstanding card balances and having them all paid off with a low-interest bank note. In both instances, the credit card debt consolidation would then be paid back in monthly installments, with the goal of having the payments lower than before. The challenge is that card companies and banks advertise all types of special offers for credit card debt consolidation, such as 0 percent APR, but you need to be careful.

Determine your purposes!

Remember, credit card debt consolidation is a serious matter, and while a 0 percent APR might look good, often regulations hide behind the offer. After all, the purpose of consolidation debt is to get ahead, not to end up in a worse situation. If you find a credit card or bank offering 0 percent APR for credit card debt consolidation, the first thing you need to do is look at the period of time that offer is for. Often, the 0 percent interest rate is only for six to nine months. Now, if you can pay off the entire balance in that time, great! Yet most people need more time.

The problem with this scenario is that after the six to twelve month period, the 0 percent APR skyrockets much higher than what you had been paying. This means for credit card debt consolidation, you are now in deeper grounds, financially. Another thing to watch for if you want to consider credit card debt consolidation is the processing fee. Some card companies will provide 0 percent APR but when looking at the terms and conditions, you see that they charge a huge processing fee to transfer balances.

Start with your credit card company!

One of the best ways to deal with credit card debt consolidation is to start with your existing credit card company. If you have good standing, ask the company what they can do for you to bring your bills down. Nine times out of 10, when a person is in good standing with a credit card company, they can ask for a lower APR and receive it. All it takes is a simple phone call, but most people have no idea this can happen.

Of course, once you go through credit card debt consolidation, you want to make sure you watch spending, keep balances down and always make your payments on time. That way, you would not end up in the same situation of being in over your head with credit card debt.

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Buying a house in 2010

One of the best results that the 2009 recession brought about was an advantage to potential first-time home buyers. Experts are confirming that home prices will continue to move down throughout the coming year. Fiserv Lending Solutions projected that the median home price throughout the nation will fall by 9.2% in 2010. Couple the fall in price with historically low mortgage rates, and you have a recipe for affordable housing. Add to the mix Congress’ extension of the $8,000 tax credit for first-time home buyers, and even more savings can come from buying property.

Heating costs on the way down

According to the US Energy Information Administration the average US energy bill will fall by about 8% throughout the year. Most areas are going to have milder weather in winter months and the price of natural gas is lower than it has been in former years. Natural gas is expected to run about 11% lower than last year and propane is 14% lower in cost. Plus fuel inventories are still high and that should help to keep price spikes down if the winter does turn out to be colder than anticipated.

Discounts abound to spur consumers into buying

Retailers are seeing a slight rise in spending, but it is still down from previous quarters of years past. Because of this, competition is aggressive to bring buyers in. That means that most stores are making their big-ticket items as affordable as possible. For example, a 32” high-definition, flat-screen TV was priced at about $1,000 a year ago. Recently Best Buy advertised the Dynex 40” LCD HDTVs for just $499.99. With deals abounding consumers are not dipping into savings or borrowing money to buy large items anymore. Now they can afford big-ticket items but still maintain their budgets. Economists are predicting that the deals will last well into 2010 as retailers are trying to make up for lost revenues due to the recession.

Savings rates are increasing and credit card debt is decreasing

New research is showing that consumers are back to saving their money. Since the economic downturn, people are saving on average 3.3% of their disposable income. Though that is below the 10% rate it was at 25 years ago, it is still well above the near-zero savings rate of a few years ago. Banks are paying better returns for savings also. The current savings rate is about 5.8%.

In addition to savings being up, credit card debt is going down. The Federal Reserve Board surveyed consumers and showed that credit card debt has already dropped by $10 billion. People are wary of racking up big credit card bills because they have a new understanding of how credit works. When consumers needed credit at the height of the recession, lenders were too busy hiking interest rates and cutting limits. Most consumers learned the hard way that credit card companies are not the saviors that they once were.

The best of the 2009 recession

The recession is now over and though it was difficult to get through, there were still quite a few positive results. Borrowing money is harder, but interest rates are lower than ever. Buying a home is still difficult, but there are enough tax breaks and price savings to make it worthwhile for thousands of Americans. Savings and credit card activities are changing to reflect hard lessons learned. Overall, now is the time to regroup and learn from past mistakes. Americans are showing signs that that’s just what they are doing.

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