What is the best way to get out of credit card debt. Do debt consolidation companies really work?

Answer 1

Most debt consolidation companies will actually hurt your credit. Your best bet is to focus on one card at a time. Pay as much as you can on that one card while paying just the minimum on the others - as you pay one off add that payment to your next lowest until they're paid off.

Answer 2

Quality credible credit counseling companies are free. You'll find them in the phone book under credit counseling. They should be able to help you put together a plan to pay down your debt. Just watch out for the so called "debt specialists" and so forth...they charge you to consolidate and make money on the interest you'd normally pay to the cc company.

Answer 3

Most debt consolidation programs are a rip-off- either actually costing you money or just doing what you could already do.

Consider this- many of them brag about their repeat customers. If they did their jobs, they would not have any!

There is no fast way to get out of debt. The best is the 'Snowball Technique'.

With this technique, first stop charging things. Try to put some money in savings to cover the things you would normally charge. (There are a lot of books and tips on trying to live on less so you can do this. This hurts too, but not as much as debt does.)

Next, you line up your card debts. The way you line them up takes a little tweaking. You want to pay off the highest interest cards first, but paying off smaller cards gives you more leverage later.

On most of the cards, pay about the minimum (always on time to avoid hurting your rating!). On whatever card you decide is #1, pay as much as you can- at least 10% more than the minimum.

Now- no that glorious day that you finally pay off Card #1, take the entire amount you were paying on it an apply it PLUS the minimum to Card #2. When this one is paid off, apply the entire amount plud the card's minimum to Card #3 and so on.

Every time you pay off a credit card, you free up money to pay off the next one faster, and faster, and faster! According to the experts, anyone should be able to get debt free in seven years this way.

A modification of the Snowball is to take SOME of the money each time and put it in savings. Different modifications take different amounts, but I would not take more than 25% of the old card payment, and not until paying off the 3rd card. Once the savings account has about $5,000, then reapply ALL extra money to debts.

Answer 4

In general what you want to do is transfer your credit card balances to the lowest-interest card you own, or go to one of those consolidation companies and they can give you a lower rate. I don't have personal experience, but I've heard they work. You just have to be smart about it and read the fine print. My credit card company keeps issuing me checks at really low interest (like 2.99%), you could try transferring your balances to that for a few months.

Make paying off the debt your #1 priority... stop eating out, cut out spending because it obviously doesn't make you happy right? Debt sucks but you can get out of it with some discipline.

Answer 5

"Going for online debt consolidation is a good option, you need to take into account the fee charged by the debt consolidation companies.

When you gets into a debt trap it becomes difficult to get out of it. Taking more loans to repay the debts leads to more stress and financial crisis. Finally, there is no option but to adopt debt consolidation, which leads to a new llease of life. Many people receive abusive calls from debt collectors and are stressed. Hence opting for debt consolidation is the number one solution and helps to overcome abusive calls and be free from mental stress."

Answer 6

Debt consoliadtion companies will work . They will allow you to make minimum monthly payments but your principal balance will remain the same

Whereas a Debt Settlement company will negotiate with your creditor on your behalf and bring down your principal debt amount by around 30% to 70% depending on your credit companies.

You can make affordable monthly payments and be out of debt within 36 months. There are no upfront fees and hidden costs associated with the monthly payment options.

Check out this debt settlement company which has helped me out with the same unsecured debt situation.

http://www.debtfreeafterall.com

Good Luck

Answer 7

The best way to stay out of debt with credit card companies is to not use the card for anything you can't afford. If you pay it off every month, you won't have any problems.

I buy all my groceries, gasoline and most everything with credit cards. I always pay off the entire amount though. I get well over $600 a year back from the 5% and 1% rebates on stuff that I have to buy anyway.

NEVER buy anything with a credit card that you can't afford to pay off when you get the bill.

Answer 8

call the customer service number and cancel ur account. pay the balance as quick as u can. is the only way.when i raise my balane above what i think is acceptable, i put the card out of sight until i bring my balnce down. the only way not have debt is not to make it ... and credit card companies looooove it when we get carried away.. they can charge fees we never knew existed and they will have a perfectly legal excuse or explanation.if u owe, pay, don't get caught in the cycle. debt consolidation works for the company...not for us. believe me...u can do the consolidation urself.

Answer 9

No, not really. The best is to see one of those credit help agencies one sees on TV and have them work for you on lowering your debt, and the interest charges etc.

Answer 10

They work but are generally bad for your credit. I know it sounds easy for me to say but set up a budget for yourself. It might take a 3-5 years to get back to zero but it is well worth it.