Your Debt Threat

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With the economy in shambles, unemployment pushing 10% and a credit crunch that is squeezing tighter, consumers are searching desperately to consolidate credit card debt. Many ultimately decide to find that relief with some sort of debt consolidation loan.

With very few options, consumers often end up with a choice between a balance transfer or a debt consolidation loan as their options to get help with credit debt. Admittedly, the utility of one option over the other will depend mostly on of unsecured personal loans, and the options available to that consumer to consolidate credit card debt.

Interest Free Credit Cards: A Short Term Option For Help With Debt

While not a long term solution for consolidating debt, a 0 APR balance transfer is an interest free way to consolidate credit card debt for about six to twelve months. If the consumer wanted to extend the consolidation for a longer period of time, he or she would search out other 0 interest credit cards near the end of the initial term and transfer the balance before the interest free credit cards offer expired.

However, there are three major disadvantages of using short term interest free credit card balance transfers to consolidate credit debt.

The balance transfer usually carries a 3-4% balance transfer fee. If the consumer is lucky the balance transfer fee would be capped at $50 to $75 dollars. However, in recent months, some issuers have been removing the caps on balance transfer fees.

Good credit scores are essential to access 0 APR balance transfers. If the consumer has missed a payment or made a late payment on any other bill, that fact will be registered with credit agencies. Issuers are unlikely to approve the application (especially one with a 0 APR balance transfer offer).

It is a gamble. when using interest free credit cards for consolidating debt, the consumer is “betting on the come” (to borrow a term from the game of craps). The consumer is betting that he or she will either be able to pay off the credit debt before the end of the time period or transfer the remaining balance to another interest free credit card.

That is a steep gamble, especially in our current economic climate.

As such, the interest free credit card should be reserved for those that can pay off the balance within six to twelve months.

Unsecured Debt Consolidation Loans: A Long Term Solution To Credit Debt

A long term alternative to the interest free credit cards balance transfer game is to consolidate debt with a low interest debt consolidation loan.

Unlike the juggling involved in the balance transfer, the unsecured debt consolidation loan takes the complication out of credit card debt relief. A debt consolidation reduces many credit card debt obligations to one single monthly repayment. The consumer does get the advantages of: (1) a single low monthly payment, (2) the security of knowing all other debts are paid, and (3) the peace of knowing that when the final payment is made, the consumer will enjoy complete debt relief.

What About Secured Credit Card Debt Consolidation Loans?

In most states, the consumer can open a home equity line of credit (HELOC) and use the equity in their residence to consolidate credit debt. However, in our current economic climate, home values have plummeted and there may be no equity upon which to draw.

Secondly, it is not a good idea to turn an unsecured debt into one secured by your personal residence. Credit debt is legally an unsecured personal debt. In other words, in most cases, the creditor cannot take your home in response to defaulting on a credit card.

When a consumer takes out a debt consolidation loan using a HELOC, they are turning unsecured debt into debt secured by his home.

This is rarely a good way to simplify family finances.

As such, when an unsecured consolidation loan not be available, a balance transfer is preferable even if it is a short term interest free credit card or low interest balance transfer option.

Do You Need A Short Term Or Long Term Debt Consolidation Solution?

If you have a small amount of unsecured personal debt that you could generally pay off in six to twelve months, then an interest free credit card is a good option for you. Be prepared for a balance transfer fee and be able to produce a good credit score. For those in need of longer term solutions help with debt and/or have bad credit, then an unsecured debt consolidation loan is the preferable choice.

Accessing a HELOC is not a wise solution for credit card debt relief.

Rick Bertrandt is an attorney and debt consolidation counselor. Mr. Bertrandt counsels his clients to consolidate credit card debt using the tools found at 0 Credit Cards Guide.com

Most people want to know how to get out of debt fast. The good news is that there are strategies that can be used to do so. Let’s start by saying that any debt situation has an emotional component to it. Most people who got in debt could have avoided some of the debt if they were able to control some of their emotions. Let me be more specific. If you go out buying stuff that you do not need in order to impress your friends, you have an emotional problem. If you think that you need all the Diamond, Gold, Preferred cards to push up your bruised ego, you have an emotional problem. The following are some ideas you can use to get out of credit card debt.

- Stop charging: if you want to get out of credit card, you cannot continue charging more on those cards. Ask yourself why you are in debt in the first place. As stated before, we usually get in debt because we cannot control our emotions.

We use money to fix problems that money cannot fix. And we unfortunately use money that we do not have to fix problems that we could use some rationality to fix.

- Try to get a lower APR on your credit card: one strategy that credit card use to keep you in debt for a long time is to manipulate the interest rate that they charge you. The higher your interest rate, the longer it will take you to pay down your balance. Call your credit card and ask for a lower APR. If you cannot get that from the first person that you talk to, try talking to a manager. Appeal to their emotions. If you try long and hard enough, you will be able to get a lower APR.

-Transfer balance from high-APR cards to low-APR cards: this is the way you can control yourself the APR you pay on some of the balance you owe on your credit cards.

Hopefully, the above mentioned strategies can help you pay off your credit cards quicker

Here are the top 3 simplest ways to get rid of debt.

Get Rid Of Debt By Consolidation

#1. Consolidate Your Debts – Get Professional Help

Consolidating all of your debt simply means getting a low interest loan which can cover all of your debts and paying off all the other debts with that loan so you have one low monthly payment. This makes it much easier to budget and determine how much you can afford to spend.

Debt consolidation sounds easy but it can be difficult to do without knowing a bit of information and getting the proper help. There are some things you should know before jumping right into debt consolidation.

There are many free ebooks online which describe how you can eliminate credit debt and one of the methods described in detail is often debt consolidation.

Some of the risks include fraudulent consolidation companies, secured consolidation loans that need large assets, and temporary “lower” interest rates, and debt plans that leave you with little choice but to shift debt again, which can lead to a very poor credit rating.

Check out some free “Debt Elimination” ebooks before going straight to consolidation to get rid of your debt.

Before signing on any dotted lines or making any big decisions it is always good to talk to an advisor. An advisor could simply be someone from your bank, an accountant, or a professional counselor.

Get Rid Of Credit Get Rid Of Debt By Budgeting

#2. Create a Budget

No matter what route you take to get rid of dent you will need to create a solid budget and stick to it like your entire life depended on it.

It is important that you find a quite place and sit down and make a complete list of all monthly expenses.

Then calculate your income and debt.

For one month you should track everything you spend. This will help to find places where you can cut down expenses and begin living within your means.

If you are looking for a sample budget there are plenty online that provide excellent detail that you can download and modify to fit your current financial situation.

It is important that when you create your budget you have all the information you need about your current financial state. For example, you should know the total of your debts or loans and credit cards. Also you need to know the interest rates if is tax deductible. Always begin paying the debt that has the highest interest rates first. This can save you hundreds of dollars every year.

Get Rid Of Debt Get Rid Of Debt By Eliminating Credit Card Use

#3. Stop Using Credit Cards and Get Rid Of Your Debt.

Credit card companies want you to have multiple credit cards simply because they make a fortune of of the interest rates. you should get rid if all your credits except one and only use this one in extreme emergencies. Make sure it is the one with the lowest interest rate.

If you are have a very difficult time to get rid of debt, you must immediately stop using your credit card.

Make sure when you do up your budget that you include the monthly credit card payments. It is important that you pay more than just the minimum payment every month. If you can only afford to pay more than the minimum on one card than make sure you pay the highest interest card first.