Debt Solutions – How the Federal Government is Promoting Credit Card Help

Taking loans or any other form of debt is not a new thing. People all around the world have been taking financial liabilities to cover the expenses which they cannot cover with their earnings. Other than that people also use credit cards to have an alternate payment mode. Some people also do not prefer carrying cash and prefer carrying cards.

Recession as a issue has created problems in every part of the world. Most of these problems are related to monetary issues and have affected the earnings of the working class. Along with people doing regular jobs, small scaled traders and entrepreneurs have also have to battle financial complications.

In the United States, people have lost their jobs and companies have reached the stage of shut down. A large percentage of people have lost their jobs and have a large credit bill which they owe the bank. The situation is even more complicated as banks are facing sever financial crisis.

This is because of the credit process which they have. Money granting companies pay a large sum of their cash funds to loan takers. As more and more cash is spent in a liable form, the amount of charged interest increases and the bank earns more. During recession as well, the same strategy was used.

As a result of economic problems, a lot of people had lost their jobs and thus were weakened in monetary terms. This is not the only reason for being a defaulter and people do not manage their credit expenses and land up in a long liability. Debt Solutions were introduced by the United States to create coordination between the loan giving bodies and borrowers.

Now, let’s understand how debt solutions work. The initiation of the process is done by the loan takers. They search for a relief company to get them a reduction settlement. The first step in the procedure is to get a dependable settlement company. The relief firm is the key role player in the entire negotiation process.

Most of the hard work is done by the relief company which prepares all the parameters which have to be discussed. A lot of people have been fooled while selecting the relief company. This is because a lot of them do not have the technical knowledge to test the organization in the right manner.

Commonly, people just check whether the company is offering the required services or not. They do not even ensure whether the firm is legitimate or not. Haste is a very negative factor while searching for reliable debt solutions.

Credit Card Relief – Bankruptcy is NOT the Only Answer!

People have been using credit cards for years now, and just as well, they have been seeking credit card relief for the debt they manage to build up over time! Everywhere you look now, there are advertisements and information about personal debt relief.

Television commercials, bus stops, brochures, magazines… It all seems to be so overwhelming to one looking for debt relief, doesn’t it? But no worries, times have made it easier to gain credit card relief without too many sacrifices.

Well, in the past couple years it has become easier and easier to gain relief from credit card debt. Before, those in debt would file for bankruptcy as a means of escaping the debt and starting fresh.

It was very easy to file for bankruptcy at the time, and it was even encouraged as a “last resort” action. Still, with all good comes bad, and bankruptcy has a couple cons in the long run.

After filing for bankruptcy, there is a chance that your whole credit score and history will be wiped clean. This can cause difficulties in acquiring loans and buying certain items like vehicles or homes.

While filing for bankruptcy, you also do not have much say on the process, as it is the credit card companies and banks who make the rules. Also, when filing for bankruptcy, our whole economy suffers since the bank loses all the money it has loaned to you.

Bankruptcy also doesn’t settle all your debt, and will leave you paying for a portion of the loans you have acquired. The last con in filing for bankruptcy is that you may not file for it again during the next 5-6 years, putting you in the danger zone of falling into debt again.

But, have hope! There is an alternative to credit card relief… It is called debt settlement. Presently in our economy, debt settlement is being promoted by the government AND its financial institutions.

The promotion of debt settlement is mostly because of the phase of bankruptcy and the blows the economy received during that phase when everyone searched for credit card relief.

With debt settlement, negotiations are made with the credit card company or bank to pay off the debt. Since these companies and institutions are desperate to receive the money which they loaned to you, they are willing to negotiate deals that benefit both parties.

The fact of the matter is that these banks and credit card companies prefer to acquire back a fraction of the money instead of losing the investment in it’s entirety.

Getting credit card relief is possible, especially now! Since stimulus money has been given out to the banks, they are especially eager to make these settlements as they see some of their money coming back. That is why there are advertisements everywhere about personal debt relief… Debt settlement is beneficial to both the debtor and the creditor!

Now that you know all this, you must be wondering about these debt settlement companies… Legitimate debt settlement companies may be hard to find depending on where you look. Be aware of the company you are looking into, and do some research on their history.

You can even find reviews about the company from those who have had experience in settling their debt with said company. Often, your best bet is to inquire a debt relief network that will point you in the correct direction of legitimate and helpful debt settlement companies.

These networks will provide you with the information you need to make the correct choice on which company to choose, and help you get on your path to success! Credit card relief is possible, and quite easy now thanks to these companies and the approval debt management/settlement has received from companies, financial institutions, and thousands of people!

How the Credit Card Companies Are Taking Your Credit Away

Did you know that the credit card companies are now reviewing credit lines and if your income is down, they can reduce your credit. You may think you are secure, but then get a letter in the mail telling you that the amount of credit available to you has been reduced. Or if you apply for another credit card, the bank will look at all of your cards, and your call may trigger this credit card reduction.

I know because this just happened to me with the Bank of America, which has recently acquired Countrywide, the largest holder of mortgages in the U.S. — and why it was on the verge of collapsing before being acquired. What happened is that I have a no-interest loan that is about to readjust in July after 5 years. And in today’s economy, it is virtually impossible to get refinancing for most loans. So one loan broker who couldn’t get me a new loan helpfully referred me to Countrywide’s department that is handling loan modifications, where you might be able to get an extension of the current interest rate.

As the woman who answered explained, basically, you need to provide a couple of months of bank statements, your tax returns for the last year, a list of month to month bills and expenses, and then your information will be reviewed on a case by case basis. At the end of the call, she helpfully explained that I might apply for a Bank of America rewards card that might help me with the payments, since it was a no-interest promotion for 6 months. And she could refer me to a credit card specialist who could give me an instant approval for the card.

Fine, I said, since it sounded like a great way to get some extra credit at no interest while my business picked up. But what she didn’t tell me is that the credit card specialist would be reviewing all of my Bank of America cards, and besides approving this promotional card, the specialist could reduce the credit available through these other cards. The upshot was that after granting me $5000 on the new card, she reduced a $30,000 credit limit on another card down to $15,000, and then reduced or eliminated the credit available on two other cards which a bank manager had signed me up for. So the net result was that I suddenly lost about $22,000 in credit by responding to an offer to help me.

When I protested that this wasn’t right — luring a long-time customer in to accept what seems like a better offer only to end up in a worse credit position, her explanation was that even if I didn’t call, the bank does periodic reviews and they might have reduced my credit anyway. Or maybe not.

In any case, the incident served as another warning about how not only banks but credit card companies are cutting down on the funds available to consumers today. Is this a good way to stimulate the economy by making it harder for people to have funds to make purchases, start businesses, or make investments, which is what is needed to provide that stimulus? I don’t think so.

So just be warned. You may think you have a certain amount of credit available to you. But it may turn out to be less than you think.