Credit Card Laws: No Debt Reduction Help

Short billing periods. Sudden rate increases. Extra fees. These scenarios are all too familiar to credit card customers, but new legislation lengthens the required time between sending a bill and and its due date and provides consumers advance notification of rate changes. The new laws don't offer direct help with debt reduction, but they can at least keep the credit card companies from making it harder to pay off the debt you already have.

Credit Card Debt Consolidation: Why, When, and How
Debt consolidation is a first step toward resolving debt. You can streamline your debt reduction plan by rolling several credit card balances into one balance with one payment. Credit card debt consolidation options include:

Balance Transfers: Credit card companies frequently offer opportunities for transferring other credit card balances to their cards. These offers may offer incentives such as an introductory interest rate of zero to a very low percentage rate. Read the fine print to understand all terms and conditions. There may be a fee for each balance you transfer, but transferring balances can be worthwhile if you pay off the transferred balances before the introductory rate expires.

Debt Consolidation Loan: Unless your credit is nearly perfect, or you're willing to put up collateral such as your home or car, debt consolidation loans can be difficult to find. Secured debt consolidation loans include home equity loans, home equity lines of credit, reverse mortgages, or auto title loans. Carefully consider secured debt consolidation loans as you can lose your home or car to foreclosure or repossession if you cannot repay your loan.

Credit Counseling Services: These services provide credit card debt consolidation plans as a means of debt reduction. They negotiate reduced finance charges and fee waivers with your creditors. You'll make one monthly payment to the credit counseling service, and they distribute funds to your creditors according to your debt reduction plan. Credit card companies generally require customers using credit counseling services to close existing credit card accounts. Credit counseling services cannot guarantee that you'll qualify for new credit cards after you complete your debt reduction plan.

If you're unsure about self managing a debt reduction plan, please get help. Avoid unsolicited offers of financial help, and don't fall for offers promising immediate credit "repair" or debt elimination.

About the Author:
Karen Lawson started writing stories about birds and surfing at an early age. For more than ten years, she enjoyed a productive corporate career in mortgage banking before moving to Reno, Nevada in 1997. Karen earned BA and MA degrees in English (specializing in writing) at the University of Nevada. Significant areas of research and writing include truth and ethics in creative nonfiction, medical humanities, and the symbolism and lore of birds in American literature and culture. Karen has taught English at a community college, is writing a collection of poetry, and enjoys birdwatching and walking her basset hounds.