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Statistics provided by the US Census Bureau show that the number of credit cards owned by American consumers is increasing. Many people have credit cards as an emergency backup resource when they need extra funds. However, with high credit card fees and interest rates, your credit card debt can get out of control. Instead of dealing with the stress of your increasing debt, consider canceling your credit cards for the following reasons:

Eliminate your debt: Not owning a credit card means you don’t have unnecessary debt. If you max out one credit card and decide to pay off your debt with another credit card, you’re still left with credit card debt. This vicious cycle can escalate and leave you in a financial mess.

Maintain your budget: Staying within your budget is easier when you use cash for your purchases. Physically seeing the money you have makes you more reluctant to frivolously spend it. Handing over a credit card each time you make a purchase doesn’t make you realize how much you’re spending altogether. The shock sets in once you get your credit card statement. If you want to use a card to make your purchases and stay within your budget, use a prepaid card. Store-bought prepaid cards only allow you to spend the amount of money you put on them. When you run out of funds on your prepaid card you can replenish it as your budget allows.

Protect yourself: Each time you hand over your credit card to make a purchase you give others access to your credit card information. Whether you purchase items online or in a store, you subject yourself to identity theft. When you use cash there’s no need to disclose personal information. Identity theft can create a financial nightmare that leaves you with debt that can take years to clear up.

Avoid temptation: Credit card companies often offer tempting bonuses to attract consumers. Frequent flyer miles and points you can accrue when you use your card are not worth the hassle of paying back the money owed. Annual fees and interest rates quickly add up and add to your financial stress. Avoid using your card or acquiring one just to gain points or bonuses.

Save up: Instead of keeping an emergency credit card on hand, get rid of it. Instead, start saving up so you have at least $1000 available for emergencies.

Despite the fact that payday loans are one of the more unfamiliar types of loan products to many people, payday loan lenders may offer more loan opportunities for borrowers with bad credit than other types of traditional lender.

Payday loans are often given to borrowers with bad credit, with amounts often up to £80-£1000.

Payday loan basics

Often referred to as cash advance loans, or cash advances, this loan product is intended as a very brief cash fix when you are in an emergency situation. If an unexpected veterinary or repair bill comes about, or you fail to plan enough cash for your holiday, payday loans may be a way to cover yourself efficiently.

These lenders are sometimes more sympathetic to the needs of bad credit borrowers because the cash advance amounts are smaller and they are more concerned with your ability to repay the funds (plus any interest and fees) on your next payday.

Payday loan uses

Credit preservation may be one of the main motivations for people using cash advances in order to preserve their credit score, whether that have a less than perfect credit history or not. Delaying payment on unexpected bills beyond the payment deadline can lead to negative marks on your credit score. If the numbers all add up, it may be worth considering paying a cash advance fee and interest for quick cash versus being charged a late payment fee and getting marks against your credit history.

Application process

Applying for a cash advance loan is often relatively simple. You can complete an online application, get a quick review, and, if accepted, get your cash advance funded within a few hours. This efficiency is part of the nature of the payday loan. Its primary purpose is to help you in quick cash emergencies. Tedious and drawn out application processes do not work as well in this loan sector as they do in other traditional loan areas.

Getting a decision on your cash advance request is often fairly quick. Payday loan lenders will generally want to know that you have income to cover your loan and interest and any fees, so being in regular employment with a regular income will usually be essential. Funding may be dispersed to your bank account, giving you quick access.

The poor economy has many people searching for additional financial options. One option with a variety of advantages is home equity credit. There is a lot to consider before deciding to take out home equity credit, but the following will give you a basic introduction to how it works and some key advantages and risks.

What It Is

Home equity credit is a revolving form of credit that uses your home as collateral. Most people consider their home as their greatest asset and opening a home equity credit line is one way to put that asset to use. A lender will decide your fixed limit, or in other words, the maximum amount you can borrow at any one time. Fixed limits are quite regularly determined by assessing the value of your home and then subtracting the balance owed on your existing mortgage from a percentage (70% for example) of that value. Lenders will also take into account your income, debt, credit history or other obligations to determine your ability to repay.

Once the limit is fixed there is usually a period established inside of which you can borrow as often as you’d like. Some plans require a minimum withdrawal each time you borrow and the funds are usually accessed by special checks. At the end of the period (10 years for example) you will quite often be given the option to renew the credit line. If you choose not to renew the credit line, you will be required to pay off the credit in full or over a payment period decided by your lender. As you can tell, many of the specifics will vary according to individual lenders and specific financial situations.

Advantages

Utilizing a home equity line of credit can be useful for large purchases (medical bills, education, etc.) when money is tight. Home equity credit lines usually require low costs to maintain and have low introductory rates. Another big advantage is the flexibility it affords the borrower, both in the amount you are able to withdraw as well as the number of times you are able to borrow.

Risks

While home equity lines of credit offer many advantages, you will want to be careful in considering and maintaining a line. If you are only meeting the minimum payments throughout the borrowing period, then your monthly premiums will spike sharply when the payment period begins. To avoid this, try to exceed your minimum payments so that you are paying off the principle gradually over time. Also, beware of ballooning rates. The low introductory rates can be deceptive, so read the fine print and be aware of any additional fees, such as early-termination fees.

There are many rewards to leading a lavish life. However, there is a price we have to pay for leading such a life. I realized much later that debts had kept on piling and now there was a huge mound of debt that I was to pay off. This had affected my credit score so drastically that I could not even get credit at favorable terms and conditions. I then became determined to improve my credit score by trying every means possible. It was at that time when a friend suggested that I should go for consumer credit counseling . I also realized that I had 3 outstanding credit card debts and a total amount of $25,000 on 3 cards. To improve my credit record I decided to pay off these cards

I want to share what I did to repair my bad credit record, so that you may draw something out of my experiences if you are in a similar situation.

1. Ordered for my credit report: It was very important for me to improve my credit score that had gone down drastically. So I ordered for my credit reports from all the three major bureaus- Experian, Equifax, TransUnion. I reviewed all three of my credit reports thoroughly to check if there was any inaccurate information.

2. Disputed the inaccuracies: I realized that one of the debts that was charged to my account was not mine. After carefully going through my credit report I also noticed that a debt that I had already paid was still appearing as outstanding in my credit report. I disputed these inaccuracies in my report and was successful in getting them removed from my credit report. This helped me in improving my credit score.

3. Budget formulation: A counselor from the consumer credit counseling agency helped me formulate a budget. This provided me with a clear idea of what my income was and where was I spending it. The budget helped me realize that I was earning enough to live a decent life but it was not enough to indulge in luxuries or to pay off the debts that I presently had. Thus, I adjusted my spending as per the situation.

3. Credit card consolidation: I had to pay off the 3 credit card debts if I was ever to improve my financial situation. As my financial position permitted me to make at least some payments, so I opted for credit card debt consolidation. The total amount of debt after the disputed amount was removed came up to $25,000. The minimum payments that I was making towards my bill were as follows.

Minimum payment on the first card with debt $7,000, at 11% was $770
Minimum payment on the second card with debt $8,000 at 15% was $1200
Minimum payment on the third card with debt $10,000 at 12% was $1200

Thus, my total minimum monthly payment came up to $3170. The debt consolidation company got my interests reduced and after the reduction I had to pay $2000 every month to the company, this included the professional fees as well. I had to pay much lesser than what I was supposed to pay originally and my late fees were also waived off.

I have managed to pay off my debt and also succeeded in improving my credit score by several points. I would advise everyone to check their credit reports and increase their score (if required) before applying for a loan.

If you want to repair your bad credit on your own, then you can use various credit repair software and books that are available in the market. You can also make a decision to go for a credit repair company to help you fix your credit. You need to pay a fee against their services. Is it always sensible to go for do it yourself credit repair? This article would let you know.

There are many well-known and trustworthy credit repair companies in the market. Nevertheless, there are some scam credit fixing companies as well. The Federal Trade Commission (FTC) recommends that you shouldn’t pay upfront for services that you are yet to receive and always check the background of a company with the Better Business Bureau.

It is also suggested that you talk to the consumer protection agencies in your neighborhood before you hire a credit repair company. You should only go for a company that has an established reputation and a good success rate.

If you’re thinking about do it yourself credit repair, you can start by seeking assistance from various resources available on the Internet.

Should you go for do it yourself credit repair?

If you’re thinking about fixing your credit on your own, it’s essential that you know that there are some risks involved in it. These risks can become substantial if you can’t dedicate sufficient time to work on your credit score or you don’t have the confidence, patience and expertise to do it. You should know that all your efforts might prove to be futile and your credit score might get spoiled in this endeavor. On numerous occasions, it has been found that people who tried to repair their credit on their own by challenging their credit report landed up with a worse credit score.

Should you buy books on credit repair?

When you’re considering purchasing a guidebook on repairing credit, you should go over it cautiously. Credit repair professionals who have evaluated a lot of such books have discovered that except for a cheap price, the information is obsolete and there are incorrect reports. They are of the opinion that these books have been authored by individuals who never attempted to fix a credit score at any time. These books are simply not as good as seeking assistance from an expert. You should realize that the credit repair industry is a dynamic industry. Due to this reason, an expert who is devoted to the industry can really make a lot of difference when it comes to fixing your credit.

Hopefully, the above mentioned details help you understand that do it yourself credit repair might not be fruitful all the time.