Money: Credit Card Debt

The Easy Way Of Consolidation Credit Card Debt

If you aren’t careful you can let your debts get out of control and before you know it you are in real financial trouble. One of the worst debts for getting out of control is credit card debt. There are millions of people worldwide that are looking for a way of consolidating credit card debt so that they can get back in control of their finances. The problem is that some people just jump into the first offer they see about consolidating their debt and some consolidation offers can actually make you even worse off than you already are. It is important to do your research regarding consolidating credit card debt before you sign up to anything.

One of the most common types of consolidation loans that people use to consolidate their credit card debt is to transfer the balances of all their cards to one new card that has a lower interest rate. For example, if you have 3 credit cards each with a balance of a few thousand dollars and they carry interest rates of 17%, 19% and 20%. If you could move the balances of all three credit cards to one card that had a lower interest rate such as 13.5% then you would save money and have a lower monthly payment. Sounds like a great plan doesn’t it?

But don’t look at that lower interest rate and think you are getting a great deal, just take your time and look into all aspects of this new credit card you are considering. It is possible that there may be a catch; you know the saying ‘if it seems too good to be true it usually is’ keep that in mind and do your research.

It is quite possible that this 13.5% interest rate is a honeymoon rate. That means that the credit card company offers a low rate to entice people to open a credit card account but that rate is only for a certain period after which time it will increase. It is possible that when that interest rate increases you could be on a higher rate than you originally were with your other cards. Before opening a new credit card account you need to know if it has a honeymoon interest rate, when that interest rate is likely to increase and what rate it will increase to.

The next thing you need to consider is what you are going to do with your empty cards once you have transferred the balance to a new card. When you are consolidating credit card debt by transferring your credit card balances to one new card you will be left with those three cards with zero balance. What is stopping you from going out and maxing those cards out again? Before you know it you are in more debt than you were to begin with. This is sometimes referred to as ’empty card syndrome’ and some people just can’t help themselves and think they can go and spend money because they have these empty credit cards. It is probably a good choice to cut those credit cards up so you will not be tempted to use them or put them away somewhere so you only use them in case of emergency.

If you can get a good deal when consolidating credit card debt with a good interest rate for a long term and you can throw away your old empty cards, then consolidating your debt will put you in a better position financially. Manage your debt wisely and you will have a good financial future to look forward to.

Can You Be Sued For Credit Card Debts

If you have gotten behind with your credit card debts you may find yourself wondering can you be sued for credit card debts. If you are concerned about this, I don’t want to alarm you further but you should know that you can actually be sued for credit card debts. Although you may get away with being behind with your payments for a long time, possibly even years, but you won’t get away with it forever.

Credit card companies want their money and they will take whatever action is necessary to get their money from you. When you don’t pay your credit card payments, or only pay the bare minimum, they will slowly accumulate and the amount you owe just gets bigger and bigger. You may even begin to think that you have gotten away with paying the debt and that bank must have forgotten about it. But they haven’t!

Credit card companies will start charging you extra fees if you are late paying just one payment because they are serious about getting their money back. They may even call you to remind you that you owe them money and to make arrangements for you to pay.

Some credit card companies will even increase your interest rate once you start making late payments. This may depend on your agreement with the credit card company but don’t be surprised if, once the introductory offer period is over, you see your interest rates soar.

If the credit card company increases your interest rate, charges you late payment fees and calls you to make payment arrangements, but they are still having trouble getting the money from you, then they will turn the debt over to a collection agency. The sole purpose of a collection agency is to get the money from you. You will most likely receive a letter from the agency that you need to reply to within 30 days.

The collection agency will give you two choices. You can either make the payment or you can dispute that the debt is yours and you need to do one of these options within 30 days. If you do nothing then they assume that the debt is yours and will proceed to the next level.

They will continue to send you debt collection letters and will also start calling you. If a collection agency is not successful at getting the money from you then they may transfer the case to someone else, so you may have to deal with several such companies.

After a certain time period, if the credit card company has not received their money they can choose to write the debt off or to sue you for the amount of money you owe them. If the amount is very small then they will write the debt off but if the amount owed is significant then there is a very good chance that they will sue you.

Don’t assume that credit card companies only go after huge amounts of money, there have been people sued for as little as a thousand dollars. Then of course there are court costs and legal fees added to that amount so your debt will be even higher.

When you enter into a credit card agreement you sign a contract agreeing that you will follow their terms. When you didn’t make your payment by the due date you broke that agreement, which is a legal document, and therefore the company can sue you.

Can you be sued for credit card debts? Yes you can and many people do, so if you have credit card debt it is best to contact your credit card company and make some sort of arrangements to pay your debt off.