Tips to Handle a Cash Flow Crisis

Summary:
You never know when a financial shortfall can happen. So it’s better to be prepared. Debt management program helps you tackle the economic crunch.

Debt management solutions

There are no guarantees in this current economic situation. With the recession and unstable stock market, things are getting worse day by day. In such a situation, financial shortfall can happen even to the most economically secure person. One wrong move can saddle you with debt problems. But debt management programs teach how to handle cash flow so as to avoid any shortfall situation. Here are some debt management solutions helpful for managing crunch cash flow situations

Readjust your budget

The first thing you learn with a debt management program is to adjust your budget. Normally you maintain a budget, but that’s not enough, especially when you are on the threshold of financial crisis. Experts of debt management teach you to cut out unrestricted expenses – anything that’s not absolutely necessary to survive. Stop eating out, partying, buying designer clothes and everything that you can do without. Instead, use this money to pay off your credit bills.

Maintain a finance calculator
It’s very important to keep track of your expenditures. For that, debt management solutions experts suggest a finance calculator. Keep details about every expenditure you make specifying the date and amount. It’s just like any financial ledger and will help you know how much you owe.

Build an emergency fund
Counselors of debt management programs strongly recommend building an emergency fund which will take care of unexpected emergencies like an accident or job loss. This is one of the most effective ways to strengthen your financial security. It’s ideal to have a minimum of 3-6 months of living expenses in the emergency fund so if any cash related crisis arises, you can cover it.

Approach creditors
If your debt amount is very high and you are unable to make even the minimum payment at the end of month, then debt management solutions experts recommend approaching your creditors. Explain to them your financial predicament and request to lower your monthly APR. Although there is no guarantee that creditors will agree, most often this trick works as creditors just want to have their investment returned, even if slowly.

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Understand Your Options through Debt Management

Summary:
Debt is unavoidable in our current economic scenario. But instead of panicking, it is definitely worth exploring the possibilities that could lead you to be debt-free. Debt management is your constant companion in your quest to be debt-free.

Debt Management Solutions
Debt brings with it a lot of psychological and mental stress along with the financial disturbance. Rather than hiding and not answering creditors’ calls, it’s better to approach an effective debt management solutions provider who can assiste you in dealing with your debt. Through counseling, devising a suitable debt management plan, negotiating and settling down debt, these debt solutions providers are there for you at every step.

Objectives of Debt Management Solutions

Reduce your stress. 
Debt management planners’ devise strategies to settle your debt and strengthen your dwindling finances.

Freeze interest rates and thus prevent your debt from accumulating.
Debt analysts try to reduce your interest rates by providing counseling and building a debt management plan. Be it through credit card balance transfers from high interest rates to lower ones, home equity loans, curbing extra expenses or even reprimanding you against using high interest credit cards too often, they adopt all means to reduce your interest rates. And reduction in interest rates will simply stop your debt from growing further.

Arrange one monthly payment scheme.
Very often we lose track of how many debts we need to pay off at the end of the month. Debt management offers the unique solution of debt consolidation where you will no longer miss any monthly payments. You just need to consolidate all your debts and pay them off through a single monthly payment scheme.

Make debt payoff affordable according to your income.
It’s better to make a minimum payment than non-payment or a late payment. Covering all your debt in this way will improve your credit rating. What’s more, based on your good credit rating, you may even be able to buy extra time for your debt repayment from your creditors.

Stop creditors from chasing you.
You don’t have to hide from creditors anymore. Debt management analysts are there to handle calls on your behalf. With a proper management plan and an improved credit rating, debt agencies prepare you to face your creditors with new confidence.

Restrict legal insolvency procedures. 
A Debt management plan covers many aspects of debt settlement. However, the basic objective of an effective debt plan is to stop the debtor from going bankrupt. Although there is no legal binding, creditors also prefer this as it offers them a much better return on their credit than a bankruptcy scheme.

Debt Management – A Step towards Financial Freedom

Introduction
Are you one of the many who are trapped by debt and desperately looking for financial freedom? With some easy-to-follow strategies, debt management can be the key to being debt free forever.

Debt Scenario
The debt situation is very serious in all corners of the world today. Even powerful countries like the US and UK haven’t escaped from the trap of debt. Monthly bills, credit card interest, mortgage loans, educational loans, medical expenses – the list of the various forms of debt is endless. With so many bills to pay off, it’s not unusual to lose track of debt payments. But with an effective debt management solution, you won’t have to worry about anything.

A Debt Management Secret
According to debt management analysts, a little debt is not so bad. In fact, it can turn out to be profitable for you. Sound contradictory? Well, not really. A home equity loan can be a good option for achieving income tax balance. Also you can consistently pay off your creditors if your debt amount is less, and it will build a good credit rating for you. Based on your rating, you can also obtain other loans with lower interest rates.

Debt Management Keys to Breaking the Cycle of Debt

Curb High-Cost Debt
Debt management strategists often suggest paying off your highest interest credit card balance first. But don’t stop your lower interest debt payments, rather continue with the minimum payments. Once the higher interest debts are paid off, you can work on the balances of your other debts.

Maximize the Usage of Debt Consolidation
Debt consolidation is a good option for paying off debt. Debt management experts suggest a number of ways in which to speed up your debt payment proceedings. Some prominent strategies are:Balance transfer from high interest credit card to low interest credit card. However, it is advisable to have a clear understanding about the transfer fees before choosing the option or you could end up paying more than the initial credit card payoff. Home equity loans offer low interest rates, and there is also a tax deduction provision. Hence, it’s a good debt management strategy to opt for a consolidation loan.

Avoid Sacrificing Retirement Savings
Retirement saving is a wise plan for saving for the future. Even though debt payment should be your highest priority, debt management analysts recommend it shouldn’t be at the sacrifice of your retirement savings.

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How a Credit Card Balance Transfer Can Improve Debt Management

Introduction
Did you know that a credit card balance transfer might be a good method for paying off your debt? Keep reading to learn more about what debt management strategists offer as the reasoning behind this and the benefits associated with balance transfers.

Debt Management Planners Support Credit Card Balance Transfers
Debt management planners suggest that a credit card balance transfer can be a safe option for paying off high interest debt because it amounts to essentially borrowing from low interest credit cards. However, transferring a balance is not a simple procedure. There are several aspects to consider or it could end up becoming a costly affair.

Per a new guideline issued on February 22, 2010, all credit card holders are required to maintain higher interest rate balances by making payments above the minimum level. Business analysts might consider it an additional burden on debtors but it will actually facilitate balance transfer pay off and allow card holders to pay less interest. So in a way, it is a win-win situation for credit card holders.

Choose a Good Credit Card for a Balance Transfer 
Debt management counselors advise to check for certain things when choosing a balance transfer credit card, like the introductory rate, validity of the introductory period, post-promotional interest rate and balance transfer fee, if any. Also make sure to enquire about how you can qualify for an introductory interest rate if you opt for a particular credit card.

The Goal is to Save Money
The primary objective of a debt management solution is to save money, and a credit card balance transfer is no exception. The trick is to repay the entire balance of your credit card within the promotional interest rate period. This way you will make the most of the savings from the balance transfer.

Maintain a Healthy Credit Score
A credit card balance transfer might affect your credit score. A high credit balance indicates more debt and creates a negative impression among creditors. That’s why debt management counselors recommend doing anything you can to avoid a bad credit score.

Double-Check your Credit Card Balance Transfer
After you transfer your balance to a new credit card, it is recommended that you double-check to make sure the transfer was successful. If you have opted for a debt management plan (DMP), don’t forget to ask for a billing statement showing the transfer. If there is any mistake in the balance transfer, you can find out about it easily through the billing detail. It also will help you track any missing or delayed payment that could become a problem in your debt repayment later.

A Complete Guide to Debt Management Solutions

In today’s economic crisis, debt management is a savior for all debtors. However, the concept of debt management is vast and includes various types of services. Knowing the types of debt services will help you chose the right service for managing your debt.

Types of Debt Management Solutions 
Per a recent analysis, in 1980 consumer expenditures were 65% on average in the US, but today it’s a whopping 110%! With the economy showing no leniency and expenditures growing leaps and bounds, many consumers are falling prey to debt and bankruptcy. However, debt management helps consumers manage their expenditures effectively and become debt-free. Debt management solutions cover many services. Some of the more prominent ones are discussed below.

Non-profit Debt Management Solution
Many consultants offering debt reduction services are non-profit, which means they charge very reasonable fees. If you are looking for a quality service at very nominal fees, this one is for you.

Holiday Debt Management 
Paying off holiday debts is a headache for many, but there is a debt management service exclusively meant for holiday shoppers. While planning your holiday pay-off, it is suggested that you pay off higher interest credit cards first and transfer balances to lower interest rate credit cards. If your company offers a Christmas or year-end bonus, it would be wise to save a significant amount to put towards holiday debt payments.

Consolidated Debt Management Loans
Consolidated loans have lower monthly interest rates and longer time periods. It makes sense to choose these to pay off higher debts. However, you have to be disciplined about your expenditures so as not to fall prey to some other bigger debt again.

Credit Card Debt Management 
An important thing about credit card bills is to pay them on time. A delay in one payment might increase the interest on other cards as well.

Educational Programs on Debt Management
Most often we fall prey to debt because we do not know how to follow a budget effectively. That’s why many service providers offer educational programs where they make you aware of debt and show you how to control your budget so as to avoid debt situations. These programs are inexpensive and in many cases even free. This type of debt help service is very useful because they also help you stay out of debt in the future.

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Pros & Cons of Credit Card Balance Transfer

Credit card companies are making big business these days. With the extensive use of credit cards by their customers, finance charges mount up very quickly. When such conditions arise, a possible solution is credit card balance transfer. This involves shifting one credit card balance to another credit card.

Credit card balance transfer is encouraged by almost all credit card providers because it attracts new customers. And for customers this is an attractive option because the new bank may offer lower interest rates and temporary interest-free periods.

So, what is the real deal with credit card balance transfers? Is this process part of a good debt management plan or just an offer to lure customers? When should you opt for a credit card balance transfer? To have these questions answered, it is necessary to understand the pros and cons of credit card balance transfer.

Benefits of Credit Card Balance Transfers

• Interest-free Period – You can save money from an interest-free credit card balance transfer. With a low APR (Annual Percentage Rate) and a sizable balance, a customer can save a considerable amount annually.

• Reduction of Debt – If the rate of interest is low, it implies that monthly payments can clear the outstanding balances sooner.

• Budgeted Borrowing – If the transfers are managed successfully, the interest rates can be minimized. Furthermore, this method of inexpensive borrowing can prove to be cheaper than a personal loan.

• Unsecured Debt – Credit card debt is unsecured. Since the lender does not have collateral, an alternative debt solution can be initiated if the credit card balance transfer fails to reduce debt.

Disadvantages of Credit Card Balance Transfers

• New Lines of Credit – The purpose of a credit card balance transfer can also have a contradictory effect. Sometimes consumers are given higher spending  limits with their new line of credit, which may result in additional spending that can destroy the very purpose of the credit card balance transfer.

• Availability – Interest-free credit periods are available only to those with a good credit history. Those with late and missed payments do not qualify for full benefits.

• Transfer Fees – Card providers usually charge a flat fee or a percentage of the balance to be transferred. This fee is added to the owed amount, implying that a customer may only be able to start saving on interest payments after a few months.

• Expiration of Introductory Rate – Once the introductory rate expires, the APR can become higher again, resulting in the debt situation returning to its earlier scenario.

A debt management plan is usually only effective when it is well thought out. If the credit card balance transfer is not promising enough to improve your financial condition, then it is better not to do it. On the other hand, a good credit history and an effective management of credit card balance transfers can improve your financial status. So, use the pros and cons above to assess and determine your current debt scenario, and opt for a credit card balance transfer only if it is capable of improving your current financial status.

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