My Debt Relief Plan

It is a fairly simple question one that you might think to yourself no not really. However you think about it you might not realize that you are being charged interest on a daily basis after the end of the purchase month.

So you go out you buy your shopping on the first of the month after you paid your credit card bill on the last day of the month. The clever credit card company tells you that you have 60 days to pay, very true average 30 days in a month one month before it shows on your card statement and then 30 days to pay that statement. Then when you get the statement the month after they would have added the interest on for the money you didn’t pay off.

Complicated isn’t it? That is the way the credit card companies like it because that way they can get away with pretty much anything.

Another scenario for you to consider, you go through the procedure of calling the credit card company and arranging a lower rate (great move! Lower interest rate means the less you pay) Now if you are very careful then you will ensure that you make every payment on time and that you don’t miss a single one. BE WARNED if you miss a payment or you are late on a payment then the credit card company will hike up your interest rate to the absolute maximum and you will have to pay all the extra interest that you wouldn’t have paid if you had met all the payment terms.

Avoid at all costs going over your set limit, if you do get close to your limit and you are not sure if you are going to go over or not for that month, STOP using the card and call the credit card company and talk to them. The only way you can avoid a stack of fees that you do not want or need is to communicate with your bank.

The banks and credit card companies do not want you to be in serious debt as if you are you stop spending and they don’t make any money from you which is bad business for them.

So to sum up if you are not paying on time your debt is going to get worse, if you are paying late your debt is going to get worse, if you are not paying off your cards each month then you are going to get ever increasing interest payments.

Your bad credit is not a death sentence for high interest rates. In fact, it may actually help you get lower rates.

Many major credit card companies actually provide lower interest rates to cardholders that have bad credit and poor payment histories. They do this to help the cardholder prevent defaulting on the debt by filing for bankruptcy or going to collections.

If you have bad credit and are getting hammered with brutal interest rates, consider if you are ready to get out of debt. If your credit card debt is becoming a huge burden, then you might want to consider taking action.

Here are aspects that can qualify you for lower interest:

Credit card companies will also consider special circumstances such as job loss or medical problems. According to Daniel Johnson, Accredited Financial Counselor for Personal Financial Network, these “life-changing occurrences may be taken into account to justify lower payments as well as lower interest.”

The Catch

In order to receive lower interest rates granted by card issuers, you must be willing to stop using your credit cards. This means using cash or a debit card to make purchases, and only those that you can afford to make. Indeed, this is the first step to ending your reliance on credit cards.

If you have been using your credit cards just to pay for groceries and gasoline, then you are likely already exceeding your income. You may be asking how you could possibly be able to go without those credit cards when you need them just to get by.

Using credit cards may help you get by in the short term, but they are plunging you deeper into debt. The longer you go, the harder it will be to get out of debt and the fewer options you will have. Many people wait until bankruptcy is the only choice.

The key to this special debt management program sponsored by credit card issuers is that it allows you to make lower minimum payments. Most debt management clients find that their combined credit card payments drop by so much that they are able to afford to shop without using credit cards. That way, they can still afford the things they need without using credit cards.

If you think you might be eligible for a debt management program, consider meeting with a credit counselor to discuss your situation. Getting help now can help you save money each month and get out of debt.