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Credit Cards and Bankruptcy

The inevitable trap of credit cards and the preying by banks on their victims may lead many to bankruptcy. There is no easy way out of financial situations when income simply does not match expenditure. We all want the latest and best things on the market and many acquire them through loans on those pieces of plastic. The facts are, however, that the interest charged may mean that repaying such loans quickly puts it out of reach of meeting it.

Banks are not so honourable that they will surrender their biggest money earners, namely the credit cards. The ones who use them are ‚cash cows‘ supplying their lenders with huge incomes and vast annual profits. It’s like gambling when one puts money in and gets little back in return.

In times past I too was hooked on credit and then some valuable lessons came to hand. The goods I was buying during sales, and so forth, were costing twice as much as they would if the same items were bought for cash. Not only that but much of the stuff filling my cupboards was unnecessary and likely would never be used.

Banks and sales go together. One often sees stores offering extra discounts for using a Visa card. It does not take a genius to know how much the business receives back for this slight-of-hand deal. Nor does one need a calculator to check on where the institutions are making most of their money.

At the moment in Australia interest loans on property have never been lower. One can get a mortgage for something like 1.5 percent or even less. That is because the banks know that people will be forced to sell that property at a great loss if they go bankrupt through using their credit cards. With that in mind the offer of extended credit is given to the mortgagee.

There is a move afoot here to force banks to disclose the source of their income while the Opposition wants a Royal Commission into banking practices. With the focus on the ongoing links between credit cards and bankruptcy prominent in the media it is long overdue.

The best way to avoid the trap is to tear up the cards and have nothing to do with them. Bargains are only such when there is a genuine saving to be had from the purchase. If money is correctly managed then buying things for cash will quickly become a priority.

For many people, debt is a way of life. Don't allow yourself to feel discouraged if you have to search for options for credit card debt relief - you are not alone. There are millions of others out there in the same situation. It usually starts with someone getting behind on a couple of payments and before they know it, the interest rates and late fees are blown out of control.

There are options for relief. There is no need to sit around biting your nails all day wondering if you are about to get sued, or when / if you should start filing for bankruptcy. The good thing about credit card debts is that they are easier to deal with than tax debt problems and child support back payments.

If you are already falling delinquent, your credit score is probably already being negatively affected. It will take some time to get everything back on track and recover. What you can do is start doing damage control, whether by freeing up more money each month with an arbitration program or paying everything back with a consolidation loan.

It might be worthwhile to get credit counseling. Most of the companies involved in the debt-relief industry offer some sort of counseling service. A certified counselor can help you create a more affordable budget and learn how to live within the new means. The counselor will also offer advice on what best suits your situation, increasing your financial literacy.

Some credit repair / relief companies even offer FREE consultation to help you get started. You might just be required to fill out a quick survey about your situation and provide details about how much money you owe.

How to Choose from Options for Credit Card Debt Relief

Don't just choose any old company. Choose a counseling service that will help you understand all of your options for credit card debt relief. One such option might be a "hardship program", which will involve your interest rates going down temporarily in order to provide you with a chance to catch up. If you choose a company that has experienced negotiators, you might be given the opportunity to have the amount of debt reduced. If you have the right people working on your behalf, the lender may forgive 20% or more of your debt. However, you'll be required to pay the rest of it off immediately.

Unfortunately, there are no guarantees. Avoid any credit card relief company that makes any promises. There is never a 100% guarantee that a creditor will agree to anything. Even if they do, it probably won't be an instant fix. You're looking at a time frame of 3 - 5 years to get everything straightened out.

You can learn about all of the options for credit card debt relief with CuraDebt. It only takes a minute to fill out the survey for a free consultation. They will let you know if your chances of getting some type of relief are good.