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Credit Card Debt: When to Seek Help
More Americans than ever need help with debt in these turbulent times. With chaos in the economic arena, unemployment creeping up, and inflation threatening, this is no time to be carrying the burden of credit card debt.
But who can help you out of the trap of high-interest card agreements when penalties and fees are mounting every day? A bank loan might let you breathe easier, but if your debt is substantial you’re just delaying the day when the other foot drops.
Perhaps the first thing to do is take a good hard look at how much debt you really have.
Calculate Your Debt Load
With a low debt load, all you need is discipline and a good budget to take control of your finances. But if your debt load is too heavy, no matter how much you sacrifice you will not be able to pay off your bills on your present income. In that case, you will have to start looking for a professional to help with debt.
So your first step needs to be finding a number called your debt-to-income ratio. This is a simple calculation:
Add up all your monthly debt: rent or mortgage, credit card minimum payments, car loans, etc. Do not include monthly expenses, such as utilities, groceries, or gas.
Add up all your monthly income: salary, bonuses or overtime, alimony, etc.
Divide your total monthly debt by your total monthly income.
Go It Alone?
If the result is less than 49% (.49), then it’s likely you can manage to start controlling your debt immediately, just by reducing your spending and increasing the amount you pay on credit cards each month.
The closer you are to that magic number, the more you’ll have to give up, though. Just for comparison, a ratio of 36% is considered affordable for most people. As that ratio increases toward 49%, the harder it will be to manage bills in the face of job loss, divorce or illness. And in times like these, it’s probably best to be as conservative as possible, striving toward a ratio between 25% and 35%.
And if your ratio is higher than 49%? Well, then you need to start considering who to turn to for help with debt.
I Need Help!
There are almost unlimited resources on the internet that you can contact for help with debt. Debt consolidators, debt settlement companies and debt relief agencies all work with credit card companies and banks to resolve their clients’ debt problems.
Each represents a niche in the credit relief industry. Some will try to reduce the total amount you owe, while others will simply try to get you better terms on existing debt. Either way, you’ll end up paying less interest and no penalties as long as you fulfill a new payment plan to reduce your debt.
It’s worth researching each type to find out which one can help most in your unique situation. Most have toll-free numbers you can call for an initial free consultation. Just remember to ask questions and demand full information about the services offered and the costs involved. Do not allow yourself to be pressured into using a servicea hard sell is a red flag in this industry. It is very important to also verify the organization’s standing with the Better Business Bureau and the Attorney General of your state and the state where the company is registered.
Skipping Out Of The Hurdle Of Credit Defaults
Today, the economy of our country is seeing a big low and is giving out volatile results in the form of a conclusion for a big trouble. Hence, this volatile confusion can also be seen in different type of analysis. Here, the analysis differ from person to person. Some big people have analysed the economy to be on edge, while we sometimes analyse an upcoming growth in several sectors.
Therefore, we can say that we are falling confused in different conditions. Currently, the banking scenario is also snatching much freedom from us but is also offering different new products and services to us.
Let us take up the condition of payday loans, where the increasing interest rates and soaring APRs are playing the role of disturbing element for a simple state of mind. One can easily bet here for the downfall of this most preferred short term loan but will you think twice if a bank is displaying ‘payday loan no credit check’ over its entrance or in advertising hoardings.
Yes, now we are coming to a right point, where we are not far to study that we might not be winning every time but are not falling in the all loss situation.
The true facts in the current dark economic climate are explaining the downfall of financial services sector of the country, however, the experts are continuously working in the direction to save the sector which earns a big part of cash for all over UK economy.
Hence, working out the simple solutions in this direction is no child’s play and the lenders like major banks and financial institutions are adopting the path of hiking monthly interest rates and yearly APRs, even for a facility like payday loans.
This rise in the subscription cost of the loans could be de-motivating the individuals looking for a credit help for fulfilling their urgent monthly expenses, because the added attraction is not clearly visible in front of their eyes.
So, we are conversing here for getting more transparency in the less visible part of this loans section. We all know that for what and how much do we need a payday loan? Our urgent expenses in a month like medical bills and education fees are not easy to be skipped out and a loan which can be repaid in a short span of three months is helpful here. But we don’t want it with an increased APR.
However, we are forgetting the presence of ‘payday loan no credit check’, where our credit defaults are ignored to provide us a sufficient amount of funds.
Further, for ending the confusion from our minds, we can directly say that the loans we prefer, might be getting costlier to achieve but before skipping out of this option, one has to look at the no credit check facility.