Using Credit Card Is Better Than Debt Relief

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Information about Using Credit Card Is Better Than Debt Relief

Published on March 20, 2019

Author: basicfinancecare


Slide 1: Whether Using Credit Card Is Better Than Debt Relief To Pay Off A Debt Slide 2: Most people use their credit card to pay of a debt whether it is a medical debt or any other without realizing the consequences of it. Credit cards nowadays are issued and are available in plenty. You will find a single credit card issuing company offering a number of different types of credit cards that have different credit limits, names and most importantly different rates of interest. Inconsiderate and extensive use of credit may reach to its limits making your financial health and situation worse. Therefore, take out some time to research and go through the pros and cons of it before you hand it over the counter for swiping in the Electronic Data Capturing device or EDC. Credit Cards and Debt Payments: Credit C ards and Debt P ayments It is best to use your credit to pay only short term expenses. This means that you must use it only for those expenses that you know and feel that you can repay at the end of the monthly billing cycle. This billing cycle may be different for each card which is the primary thing that you must consider to avoid accumulating debt in the form of interests and charges. If you find that you do not have enough credit to cover your bill you will have to consider other options such as debt consolidation, debt relief, and even debt settlement . Ideally paying off a debt with your credit card may stop the calls from the creditor or collection agency for a specific debt but that does not mean you have eliminated it completely. Ideally, it is just a way to delay such calls as these will again surface if you miss your credit card payment which is highly on the cards and have all possibilities. Consider Different Approach: Consider Different A pproach Consult with your creditors directly or through a debt adviser, debt attorney or any credit counseling agency. This will help you to find out whether the creditor will allow and agree to an interest-free payment plan. This will make your debt more manageable than accruing interest on your credit card due to non-payment. I f you take up a debt settlement program you will pay far less than the actual amount you owe to your creditor but for that, you will have to make a lump sum payment one time . Whatever processes you choose make sure that you have all your right protected and also know that the process will not cause any further problem in your debt free journey. There are lots of regulations set by the Fair Debt Collection Practices Act or FDCPA that you must know so that creditor or debt collection agency can follow any unfair practice. Your Credit Score: Your Credit S core It is your credit score that matters in the end. Any debt going to collections will harm your credit score by as much as 100 points. Moreover, if you cannot repay any debt then this fact and report will take seven years to disappear from your credit history. Therefore, the best way is to choose a federal debt relief as the federal stimulus money will give you more flexibility when you will negotiate for a debt settlement with your creditors. The creditors usually use the stimulus money as a cushion and help you to eliminate a significant percentage of your debt. You may pay it back in one lump sum or even take up a payment plan.

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