Free Debt Advice-getting Out Of Credit Card Debt

Certified credit counselors working for debt management programs offer free debt advice to needy people. Some of the things that they talk about which according to many debt consolidation companies are benefits for credit counseling are:

Seven steps from becoming debt free from credit card debt:

1. Create one of life’s most stressful lists. When it comes to dealing with your debt, the first step can be overwhelming. You’ve got to figure out how much you owe. Stack up all your bills. Then list your debts in descending order. Next to the amount, list the minimum monthly payment and the interest rate you’re paying. Total it up and don’t forget to breathe. Once you know where you stand in the debt pond, you can determine where you’re going and how you’re going to get there.
2. Prioritize. You simply can’t pay just the minimum monthly payment on everything. You’ll be in debt until you die and the extra interest you’ll accumulate is just going to add insult to injury. Examine the minimum monthly payment for the item with the highest interest rate. How much can you pay over the minimum monthly? Double? Triple? Stretch yourself and your financial budget; the more you can pay, the faster the debt goes away. Pay as much as you can on the highest interest rate item (if two items have the same rate, then put the additional money on the biggest balance item), while paying only the minimum on your lower rate items. Once you begin paying off the highest ticket items, just work your way down the list, prioritizing by interest rate and balance size. Some people like to call the pyramid approach. Some people like to go the other way, i.e. pay off the smallest balance with less interest rate and go upward.
3. Destroy the cards. Keep at most two credit cards with the lowest rates (if you don’t have a card with an interest rate lower than 14%, get one); and destroy the others. Don’t “hide” the other credit cards; DESTROY them. Once you pay off a card, notify the company that you want to close the account. Use your two remaining cards for emergencies only.
4. Familiarize yourself with your credit report and credit score. Your credit report is just like a report card. It is simply a record of your bill-paying history. You’re entitled to a free copy of your credit report whenever you’ve been turned down for a loan or a credit card. You’ll want to check your credit report for errors (a fairly common occurrence), so you can work with merchants to correct them. And once you’re repaying your debt, you want to make sure your credit report reflects your progress.
5. Make a new plan, start fresh. There must be 50 ways to leave your loose-spending ways. Account for all the money coming in and going out. Use a debit card rather than credit cards. And visit our saving money section for more info on spending and investing wisely.
6. Get help. For some, spending is as hard to quit as alcohol, drugs or gambling. For others, circumstances beyond their control — medical conditions, job loss, college education or divorce — helped dig them deep into debt. Whatever your situation, it never hurts to get professional help. Talk with a credit counselor privately to see whether a debt repayment program or a debt consolidation program may be right for you.
7. Get control on your financial future. All the credit counseling and creditor negotiation and debt management steps in the world are useless without your personal commitment to get out of debt and change the way you deal with money so that you'll never need to go through it again.