Credit Card Debt Program
A credit card debt program is sorely needed by many Americans who have gotten into very high unsecured loan debt. Unfortunately, too many people have chosen to live above their income means and the result is a mountain of revolving charge account borrowed money. And if not another purchase is bought on any account and the minimum payment is made, the debt will clear just about the time term limits are voted in for members of Congress. Those mired in steep plastic card liability will find there are two ways out. One is to let a credit counseling company assist, which has its own set of problems, and the other is develop a plan oneself.
A debt counseling service exists everywhere; online with dozens of choices, or perhaps on a street in a town nearby. Many of these services are non-profits which means they started out with the intention of truly serving the public. But make no mistake, both profits and non-profits in this business make money, and even some non-profits have lost their way when it comes to genuine service for the client first. These counseling services offer a credit card debt program designed to get a client out of financial liability within five years. Every company and agency has a different name and a different looking website, but their credit card debt program is the same from company to company. After getting a lot of personal information from the client, these counseling services through negotiations with the card lenders, will cut monthly payments down to between fifty and sixty percent of the original expenditure. These lower payments are due to much lower interest rates and if the client continues paying for the full five years, revolving account obligations will be wiped clean within five years.
But there are a couple of things that are a prickly reality when using a credit counseling service. First, only about thirty percent of clients who begin using the program stay with it to the end. Let's face it; if a person needs a credit card debt program, he has lacked the financial discipline to say no to luxury items that were outside the consumer's income means. Examples would be eating out a lot, a large screen television, that DVD collection, really nice vacations, weekend getaways, some extra clothes or a few expensive pairs of shoes and many other things that just weren't possible unless the plastic was pulled out and scanned. But the problem comes when a person enters into a credit card debt program and the client must discontinue the use of credit cards. The ability to charge without prejudice was an inbred behavior and for almost seventy percent of clients, a behavior that could not be overcome.
The second even more serious drawback to credit counseling is the damage it will inflict on a person's borrowing history and the resulting score. Since chapter thirteen bankruptcy and credit counseling have the same basic idea, that is giving the consumer a plan around the current plastic card lenders' requirements, they both put a large black smear across credit histories that will remain for years. The result for the consumer in either case is more trouble getting future credit when really needed, such as a mortgage and much higher interest rates for the loans that can be obtained. A credit card debt program that requires negotiations for lower payments on charge account debt will hurt the consumer in the long term. God requires that we love Him more than any other thing or person. Jesus made that very clear with these potent words: "He that loveth father or mother more than me is not worthy of me; and he that loveth son or daughter more than me is not worthy of me." (Matthew 10:37)
But anyone can do a number of things to craft their own credit card debt program and wrestle that debt doggie to the ground and tie it up for good. These first suggestions are not fun, not without some pain and certainly life will be different for a while during the implementation stage. Here is the first thing to do: get busy and sell a bunch of stuff! Clothes, furniture, car, boat, jewelry, electronics can be put on EBay. Listen, lawn furniture in the living room can be kind of chic. Remember that debt decay will not be removed with a root canal. Secondly, and take a deep breath, an extra job nights and weekends with every penny going to debt reduction will be a huge factor in roping in that doggie.
A credit card debt program must include a plan of picking the card with the highest interest rate and begin working on that one first. Pay as much as possible each month on that one, far beyond the minimum payment. The other accounts can be paid with a minimum payment until that one is paid off. Then take the money that was directed toward that account and put it on the next highest interest card. Keep following that pattern until all obligations are obliterated and during all this painful time, have a real long mind forum about materialism in general. The recent bank and stock market upheavals may be an American wakeup call to for all people to get to a much simpler time when a person's character was much more valued than the neighborhood in which he lived.
Credit Card ProtectionA wise consumer will seek out credit card protection in these days of rampant fraud and identity theft. While some charge account providers take steps to make sure that their clients are safeguarded against fraud and abuse, extra precautions in this area may be a good idea. Many companies monitor the accounts of every client for suspicious activity and will contact an account holder for verification if an unusual charge should come through. If a fraud has taken place, account holders can frequently inform their charge account company about any purchases that the cardholder did not make. In a digital age, perpetrating fraud on innocent citizens is unfortunately very easy. Con artists can take a number of approaches. These approaches may range from the unlawful use of stolen or lost cards, false applications, mail order scams, or telephone cons. Some charge account organizations will also offer cardholders features such as free assistance with identify theft, encryption technology on all online information, and twenty four hour hotlines and alert services. With all of this free security, why should a consumer spend good money on additional credit card protection? While there are legitimate providers of this protection, there are also unscrupulous providers who are poised to prey on innocent and fearful consumers.
The Federal Trade Commission has warned against the activities of some dishonest providers of credit card protection. A telephone scam involving false information regarding supposed changes in the law can be an all too frequent con game. The con artist will warn about the cardholder's new responsibility to pay for charges that they did not make. This caller then goes on to explain that this change in the law makes insurance coverage necessary. The only problem is the law has not changed. While each provider will have different procedures for challenging fraudulent charges, cardholders are not legally liable for charges that they did not make. The most that a cardholder is legally obligated to pay if their account has received unauthorized charges is fifty dollars. Any telephone, e-mail, or online solicitor who makes exaggerated claims of danger from thieves and computer hackers should be ignored. Some scammers will even pose as the security departments of the credit card company itself. Consumers should never share personal information with fraudulent sources of credit card protection. Disclosing personal information with these crooks including charge account numbers, social security numbers, or even addresses and phone numbers, is never a good idea. Rather than offering the individual a safe haven from larceny, these con artists are often gathering information that can be used for identity theft.
If a credit card is stolen, there are specific actions that a cardholder should take. Sometimes the best credit card protection can be found in the quick action of the cardholder when cards come up missing. Obviously, the first thing to do is to notify the charge account company. The customer service phone number that the cardholder will need can generally be found on the customer's billing statement. When the company is contacted, the cardholder will need to supply information including the account number, the date that the card went missing, and the cash amount of the last legitimate purchase along with the date of that purchase. A follow up letter that includes this information is a good idea as well. The reason for the letter is that it supplies written proof that the company was duly notified. In addition to the fifty dollar ceiling on financial responsibility, any charges that are made after the charge account company has been notified of the theft or loss are not the responsibility of the cardholder. Considering the limits on financial responsibility that are put in place by law, a consumer might wonder what additional credit card protection is required. Checking with the charge account company to see what kinds of additional security benefits are available to a cardholder can be useful. The Bible talks about the security that can be found in God. "I have set the Lord always before me: because he is at my right hand, I shall not be moved." (Psalm 16:8)
Of course, there can be other types of credit card protection. Insurance that will pay the cardholder's minimum monthly payments in the event of a financial hardship is readily available. Some charge account companies include this service in with other account services. There may be a steep fee attached to this service, so the wise cardholder will investigate the various services that their account offers. The purpose of these insurance policies is to prevent default when a cardholder is unable to make monthly payments. The cost of this insurance is sometimes based on the balance that a cardholder is carrying. With a balance of around three thousand dollars, an account holder can expect to pay between twenty and twenty five dollars each month for coverage.
There are several different types of charge account insurance policies including disability insurance, unemployment insurance, property insurance, and life insurance. This type of credit card protection may come in handy if an account holder becomes unemployed or disabled. Property insurance will protect the consumer from loss when an item that was purchased using the charge account is lost, stolen, or broken. Credit life insurance will pay off the entire balance on the account if the cardholder should die. While this kind of insurance might come in handy under certain conditions, there are better insurance bargains out there that are unrelated to charge account activity. Whatever options a charge account holder might take, careful use of this debt is always wise.