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The Problems with a Commercialized Debt Management Program
If offered a loan (loan consolidation) to pay off your existing debts, ensure that you can pay the monthly payment. Research the interest rates, fees, and terms of the loan, and don't settle if you're not happy.
Understand the particulars of your debt management program and how they approach paying off debts to your creditors. An ideal debt management program deals with all of your debts - picking and choosing who to pay is no longer an option.
Evaluate the cost of the debt management program thoroughly - is it really beneficial to pursue a service that helps you get out of debt and achieve financial freedom by charging you ridiculously high fees to do so?Remember to think this approach through - aside from destroying your credit, you are responsible for more payments, making it harder to get out of debt and achieve financial freedom effectively.
Better Alternatives to Debt Reduction Counseling
With over 60% of credit-card holders carrying a balance (1), there are many others fighting the same battle against debt. Congratulations if you've decided to tackle the problem on your own. You are now in charge and are personally responsible for your own debt management program. There are a few ways to start on the path to achieve financial freedom:- Acquire a copy of your credit report to begin monitoring your current activity but also to catch up on what's been happening with your credit thus far.
- Stop using your credit cards immediately. Remove them from your wallet so you aren't tempted to use them.
- Create your own payment plan and debt management program by consulting your creditors one-on-one. They may be able to work something out with you in order to reduce your monthly payments.
- Construct a monthly budget and outline who you will pay and how much you will pay each billing cycle.
- Do not cancel your accounts - this is a harmful action and could negatively affect your credit score.
- Resolve to be devoted to paying off your debts until they are all gone - start with smaller debts first and work your way up. You'll be pleasantly surprised with the results. Cut frivolous spending in order to achieve the financial freedom you've been dreaming of, and you'll see a change in your credit in due time.
Using your own knowledge and planning skills can help you eliminate your debts and achieve financial freedom. Change won't happen overnight, but you must be dedicated to paying your creditors with a finely-tuned debt management program until the situation is resolved. It's not an easy path, but it's a necessary one for financial and personal responsibility.
Sources
1. http://www.smartmoney.com/debt/advice/index.cfm?story=digoutofdebt
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Darrel Giann, a financial consultant and businessman, is the founder of Just $14.95.com, a website that helps people earn extra income by embarking on a career in finance. Giann, who faced financial struggles in his own life, now works to teach others how to get ahead in life, eliminate credit card debt, and achieve financial freedom.
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