debtconsolidationconnection.com

Welcome to Debt Consolidation Connection

Debt Consolidation Connection is a resource for financial education, credit counseling, and debt management. Get help with budgeting, credit card debt, loan modification, and do-it-yourself resources while keeping up with the latest in financial news.

About Debt Consolidation

A Debt Management Plan (DMP) or "debt consolidation" is a financial solution offered by banks through approved nonprofit agencies. Benefits may include lower interest rates and overall monthly payments, and no late or over-limit fees. We offer DMPs when appropriate.

While these plans may be beneficial in some situations, our certified credit counselors can help you understand the positives and negatives and review alternative solutions. It is important to note that consumers should consider a DMP only after they have exhausted all other viable options. You should NOT enroll in a DMP unless it is absolutely necessary.

We're here to help. Our goal is to provide financial education and the tools to help you get out of debt. We also may be able to help you get out of debt with simple budget modifications or alternative solutions. Call us toll free at 877-209-2225.

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Tips for Debt Consolidation Success

Just because you enroll in a debt consolidation program doesn’t mean your debt troubles will be magically eliminated. Your debt consolidation specialist will do a lot of work to help you become debt free, but the process still requires some participation from you. These are some tips you should follow to help make your debt consolidation a success.

Choose a company wisely. The first step to having success with debt consolidation is to make a careful decision about the company you use. Ask the company all the right questions like, “How does your program work?” “How much are your fees?” and “Are you certified?” Check with the Better Business Bureau to see if there are several unresolved complaints on the company. If possible, get some references from other debtors who’ve had success with the company.

Stick with the program until the end. The quickest way to fail at debt consolidation is to quit before the program ever ends. If you want to receive the full benefit of debt consolidation, you must stick with your plan until your debt has been completely repaid. Of course, staying with the program depends on some progress being made.

Make your payments on time. Now is your chance to get your payment habits back on track. Debt consolidation typically works within your budget to set a monthly payment that you can afford. So, theres no excuse for missing payments. If you dont make your payments on time, you could be dropped from the debt management program.

Avoid taking on new debt. Your debt consolidation plan will only be good for the debt you have at the time you started the program. If you take on new debt while you’re trying to pay off your old debt, it could hurt your chances at a successful finish. You may not be able to add the new debt into your program and having additional debt will decrease the amount of money you have to put toward your current debt consolidation plan. Wait until you’ve completed your debt consolidation plan before taking on new debt and be careful about it even then.

Make sure your creditors are paid on time. Theres nothing wrong with double checking with your creditors to make sure the debt consolidation company has been making your payments on time. If your credit card company has an automated number that lets you contact customer service for account information, keep that number on hand. After all, its your credit. Late payments ultimately hurt you, not the debt consolidation company.

Dont be afraid to walk away. Before you agree to use a debt consolidation company, make sure you have the freedom to end your agreement at any time you see fit. Then, if you begin to think the debt consolidation company isnt meeting your needs, for example, they're making your payments late, dont be afraid to end the agreement. But, make sure you have a good reason for ending your payment plan because your creditors may not be so willing to accept another.

Avoid taking on new debt. Your debt consolidation plan will only be good for the debt you have at the time you started the program. If you take on new debt while you’re trying to pay off your old debt, it could hurt your chances at a successful finish. You may not be able to add the new debt into your program and having additional debt will decrease the amount of money you have to put toward your current debt consolidation plan. Wait until you’ve completed your debt consolidation plan before taking on new debt and be careful about it even then.

Life After Debt Consolidation

Statistics show that many people who complete a debt consolidation plan, end up going back into debt within a few years. Even though debt consolidation can help you repay your debt, it’s up to you to remain debt-free after your program has ended. If you haven’t changed your spending habits, you could find yourself in need of debt consolidation again.

You’re advised against taking on new credit card debt while you’re in debt consolidation. You should be smart about taking on new debt after you’re program has been completed. Though many people who’ve gone through debt consolidation swear off debt completely, it’s unrealistic to expect that you’ll never use credit or debt again in your life. It’s a better idea to use credit wisely than to think you’ll be able to stay away from it all together.

Start an emergency fund to avoid debt caused by financial emergencies. Actually, it’s a good idea to begin building an emergency fund while you’re going through your debt consolidation program. That way, you have some savings to fall back on in case of a financial emergency. Continue to maintain your emergency fund after you’ve completed debt consolidation and avoid dipping into it unless it’s truly an emergency.

The most important thing to remember when you’re making new credit card charges and applying for loans is that you should never take on more than you can afford to repay. That means if you can only afford to pay back a $10 credit card balance at the end of the month, then you should only charge $10 on your credit card. Before you ever swipe your credit card, assess whether you’ll have enough money to pay back the balance.

Always make your payments on time. After you’ve built a three- to five-year positive payment history through debt consolidation, you don’t want to mess it up with a single late payment. Get in the habit of paying your credit card bills well before the due dates to ensure your payment is processed in a timely manner. On time payments will help you maintain your interest rate, reduce the cost of carrying credit, and improve your credit.

Focus on managing your money wisely. The smarter you are with your money, the less likely it is that you’ll resort to credit cards and debt to maintain your life. Good money management starts with a budget. Having a budget helps guide your spending and allows you to recognize any gaps between your income and your expenses. Seeing your expenses on paper makes it easier to evaluate your expenses and reduce them if it’s necessary.

Staying out of debt will take much self-discipline, obviously more than you had before debt consolidation. Don’t be afraid to close your credit card accounts if you’re tempted to use them to charge more than you can afford. Though the debt consolidation company would love to have you back as a customer, it’s in your best interest to stay out of debt, even if it means making some sacrifices.

Five Bad Things About Credit Card Debt

Statistics show that the average American has nearly $9,000 in credit card debt. Considering the nature of credit cards, that’s a high balance to carry. Many people who have credit card debt are in no hurry to pay it off because they don’t see anything wrong with it. If you need some convincing to get rid of your credit card debt, check out these 5 things that made debt so bad.

It’s expensive. Carrying credit card debt costs money. When you signed up for the credit card, you agreed to pay monthly finance charges to the credit card company for every $1 you didn’t pay before the grace period. As long as you carry credit card debt, you’ll continue paying those finance charges to the credit card issuer, just for the convenience of holding that balance. Most people end up paying far more in interest charges than they charged in the first place. There are better things to do with your money than give it to the multi-billion dollar credit card companies.

It can take years to repay. If you’re in the habit of making minimum-only payments on your credit card debt, it will be several years before you ever pay off the balance. For example, if you have a credit card with a $5,000 balance at 18% interest rate, it would take you 18 and a half years to pay off the balance with minimum payments. Could yo imagine spending the next 18 years pay off debt. By that time you will have long forgotten what you even purchased with the credit card.

You may not get loans. The more credit card debt you have the less attractive a borrower you are. Lenders don’t like loan applicants to have high credit card debt, so if you’re thinking about getting a mortgage loan or an auto loan think again. You’ll have to drastically reduce your credit card debt before a lender will approve you. That’s because a high level of credit card debt would make it difficult for you to repay your loan. Lenders want to be paid and if it looks like you won’t be able to pay, they’ll turn you down.

You’ll have less money for other things. Having credit card debt reduces the amount of money you’re able to spend. That’s because you must send money to the credit card issuers every month. As long as you have credit card debt, you’ll experience a decrease in your cashflow that will limit the amount of leisure spending you can do. The faster you get rid of your credit card debt, the sooner you’ll have more money for spending, saving, and investing.

It’s hard to get rid of. The funny thing about credit card debt is that it’s so easy to rack up, but not as easy to pay it off. Have you ever noticed the number of credit counseling, debt consolidation, and debt settlement companies there are? There are so many debt management companies out there because there’s a large population of consumers who are overwhelmed with credit card debt and no way out of it.

There’s nothing good about carrying credit card debt. To keep it from hurting your wallet and your life, work on repaying your credit card balances.

Debt and Financial News

President Bush says he will sign the bankruptcy reform bill that will require credit counseling before individuals can file for personal bankruptcy-

Congress moves to make credit counseling mandatory before filing bankruptcy-

12/5/08 Big Three auto makers testify before Congress for a bail-out-

9/18/07 Federal Reserve moves to ease current credit crunch and reduces key rates a half percent-

9/10/07 Sub-prime loan mess and upward adjusting mortgages rates puts more pressure on consumers-

1/03/06 Credit card companies raise monthly minimum payments, consumers squeezed-

4/15/05 Bankruptcy Reform Bill Passes House- President ready to sign- new laws in effect-

Important Information

DCC offers consumers free ongoing credit counseling services* and educational materials regardless of whether or not consumers enroll in the DCC debt management plan program. DCC also offers free educational seminars to the public. Please check our Events link for details. Please contact us for details at 1-877-209-2225.

*Fees may be charged for the debt management plan program. Terms, conditions, and eligibility requirements apply for debt management plans.