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After Bankruptcy Reform, Consumers Are Now Learning How To Discharge Debt
Thanks to the new bankruptcy reform laws, many Americans who are overburdened by their credit card debt will no longer qualify for Chapter 7 bankruptcy protection. However, consumers need to know that an alternative exists for people to walk away ...
Is Debt Consolidation For Me?
People with large debts always assume they just can't afford to get out from under their debts, so they let them pile up dollar-by-dollar, year-by-year. No one has to live with large debts, there is always a way out. Debt consolidation is for anyone who ...
Personal Debt Reduction Practices
Personal debt reduction practices, the steps people take to relieve the debt in their lives and to become more financially free, are a hot topic among financial circles. American spending habits are producing more people who are deeper in debt rather than ...
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Normally, when you're looking to consolidate credit card debt you have the following options: get a debt consolidation loan -or- apply for a home equity loan. But if your credit card debt is still manageable, you may want to consider consolidating your balances to a 0% APR credit card instead. Using a 0% APR credit card will help you spend more money paying off your balances, and less on interest charges!
To use a 0% APR credit card to pay off your debts, follow these steps:
1.) Transfer your existing credit card balances to a new 0% APR credit card.
2.) Continue to pay down your balance as usual. But instead of paying only the minimum each month, also pay the amount of interest you would have paid with your other card. This will reduce your debt even quicker!
3.) Watch your introductory period. When it's about to expire, shop around for a new 0% APR credit card and transfer your balances again.
4.) Continue this cycle until you become debt free!
0% APR Credit Cards vs. Debt Consolidation:
So you're considering a debt consolidation loan instead of a 0% APR credit card. Let's see how much you could save and how much quicker you could pay off your debt using the method shown above. Here's an example:
Assume you have an existing credit card debt of $15,000. You would like to pay $250 per month until the debt is paid off. Your debt consolidation loan was approved at 7% (much lower than your original 12% credit card!).
Beginning Balance $15,000
Total Principal Year 1 $2,014
Total Principal Year 2 $2,160
Total Principal Year 3 $2,316
Total Principal Year 4 $2,483
Total Principal Year 5 $2,662
Total Principal Year 6 $2,855
Total Interest Paid $3,516
Total Amount Paid: $18,516
TOTAL # Payments Made: 70
Now let's compare paying off this same debt using 0% APR cards
Beginning Balance $15,000
Total Principal Year 1 $3,600
Total Principal Year 2 $3,600
Total Principal Year 3 $3,600
Total Principal Year 4 $3,600
Total Principal Year 5 $ 600
Total Interest Paid $ 0
Total Amount Paid: $15,000
TOTAL # Payments Made: 50
You save $3516 over a six year period! Plus you'll be done with your payments 15 months sooner! Imagine being debt free over a year before you planned!
Words of Advice:
Although using 0% credit cards to pay down your debt is a great option, try not to switch credit cards too frequently. Doing so can negatively impact your credit report. Shop around for 0% APR credit cards that have the longest introductory periods and the lowest APRs (after the intro period) to buy you a little breathing room. Also, don't fall into the trap of spending again on your old credit cards. Either close them or deactivate them so that you don't get yourself into further debt. And don't overspend with your new card either (even if it is 0%)! Finally, make sure you apply the money you saved on interest to your new payments to help eliminate your debt faster.
To see a complete list of 0% APR credit cards, please visit:
ASAP Credit Card
About the author:
by ASAP Credit Card - Copyright © 2005
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Spain struggles to meet regions' 36 bln-euro debtsReutersRegions need to refinance 36 bln euros of debt in 2012 * They also need to fund allowed deficit of 15 bln euros * Gov't disagrees on how to back regions' funding By Julien Toyer and Andrés González MADRID, May 23 (Reuters) - Top Spanish officials are ...and more » |
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