January 22, 2010
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Can You Afford Debt Settlement?, Pt.2
Save money and time, do your own settlement.It goes without saying that keeping yourself out of debt is always the best option and often very challenging. The first step to take is stop using your credit card. Begin by developing a budget which includes credit card repayment. Sit down with the family and have each member keep track of what they spend for 30 days. Prioritize expenditures. By examining where you money is going, you'll be able to better prioritize. Sometimes you don't have to completely cut back on an item, but might be able to downsize. You should also list who you owe money to including credit card companies, mortgages, medical expenses, cable TV, telephone, insurance, etc. Design a flow chart that shows when and how much monthly expenditures are due and when and how much your paycheck comes.
Consumers can do their own debt settlement by calling their credit card companies directly rather than paying someone else to do it for them. It may require shutting down the account, but in the long run it could save you thousands. Additionally, here are some tips from the Consumer Credit Counseling Service, a nonprofit organization who provides financial and budget counseling that can help you manage your credit card debt:
• Work on paying down one credit card while making minimum payments on the rest.
• If your account is in good standing, ask your creditor to raise your credit limit. Raising your limit will change your debt ratio which will raise your credit score. Your score will be higher if you utilize no more than 30 percent of your available credit.
• Stick with major cards rather than small retail cards. Retail cards typically have higher interest rates and fees.
• Make your credit cards less available to avoid impulse shopping. The best way to avoid over spending is don't carry your card on you. If you don't have it with you, you won't use it.