Two types of consolidation options---credit counseling and debt negotiation--- involve slashing and cutting your debt payments. How they go about accomplishing this task is very different. Credit card counseling programs aim at decreasing your interest rates, whereas debt settlement services involve negotiating with creditors in hopes of dramatically reducing your balances. When it comes to decreasing your payments, debt, and time frame for becoming debt free debt settlement tends to be able to do this in a more dramatic fashion. However, in light of some of the downsides associated with this route, some people find that credit counseling is a better alternative to bankruptcy for them.
Slashing Debt Is A Top New Year's Resolution
According to a wide array of studies and surveys, more and more Americans are making getting out of debt a top New Year’s Resolution. The reason is simple: it causes a tremendous amount of stress on people. In fact, many studies are showing that debt is also a bane on marriages and relationships, as the number of divorced couples citing financial problems as the cause of their marital issues. What else can we blame credit cards for---how about weight issues?
Recent studies are showing that the average fast food purchase is 30 percent more when a person is putting it on a credit card instead of paying with cash. (Ironically, losing weight is traditionally the most popular New Year’s Resolution.) The logic is that people who are on the run can no longer ignore the impulse to buy food now that credit cards are accepted by more fast food chains. Moreover, over 77 percent of the respondents to the survey cited the fact that they were no longer constrained by the cash they had on hand, so they could buy what they wanted. In the end that means, more super-sized and “go large” meals. According to a Jack-In-The-Box spokesperson, the average increase in the size of a fast food meal results in 73 more calories and costs 67 more cents in credit card debt . Over time, these figures both add up.
Decreased Loan Payment & Bill Questions
I just took out a personal, unsecured loan from Household finance, but I realized that I cannot possibly make the monthly payment I agreed to. I know I sound stupid for taking it out, but I don’t know what to do. Do you have any advice?
Discuss your situation with the person who you took it out with (assuming it was from a local branch), and request a reduced payment. Ultimately, they don’t want you to default because it will cost them a lot of money. On the flip side, however, it may not be possible to get them to cut your payment since you only recently took it out. It is likely that they will argue that you took the loan out in bad faith. With some personal finance companies, making the first few payments is usually enough to convince them that you are acting in good faith and deserve a break. If this doesn’t work, perhaps you should contact a credit counselor to deal with them.
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