Credit Card Ease of Access

So when you are out somewhere and you do not have instant cash available, you can always use your credit card to get a room in a hotel or to buy an airline ticket if you have to visit a relative on a very short notice. Due to this reason credit cards are very common in the developed states. It is very helpful when you can get credit easily as it enables you to purchase whatever you desire minus the trouble of keeping loads of cash. It also allows you to have fulfilled your immediate needs even if you don’t have cash at the moment and are waiting for your next pay check to arrive.

The choices are too many to list. A credit card can help you with anything from reserving a hotel room to a place at the restaurant. It also enables you to purchase whatever you like without caring about the money accessible to you at that time.card

Keeping a credit card ready also means that you don’t have to go to the trouble of leaving your house to buy something. You can just sit on your couch, pick up a phone or use your laptop to go online, find the item you are looking for and pay for it using a credit card. The item you ordered will reach to you in a few days and it wouldn’t have required you leave your place to make a purchase.

Apart from the ease to buy things, having a credit card also allows you to keep aside some amount that you possess so as to deal with an unanticipated situation. So, by using a credit card to make payments for everyday items, you are able to keep yourself a healthy emergency fund.

Furthermore, credit cards also offer rebates and concessions. These rewards are usually earned by using credit cards for everyday items such as getting gas for your car, getting groceries for your household etc.

However, the usage of credit cards is not free of risks. It usually forces users into the vicious cycle of defaults as they make it a routine to buy everything through credit cards. This may be because they make heavy purchases using credit cards, not worrying about the huge bill that they are accruing in the meanwhile. Hence, it is advisable to be cautious while using your credit card to purchase things.

Debt Settlement Procedure

According to a fact, when a debtor constantly fails to pay his debt installments, creditors usually prefer to settle the debt or forgive some amount of the debt that one may owe instead of losing all the money owed if the debtor files for bankruptcy. Debt settlement is the process of negotiation carried among the borrower and the lender to lessen the amount of loan.  Debt settlement is usually considered a solution to unpaid debt payments of over a couple of months or an alternative to bankruptcy. money2

Usually, the debt settlement procedure comprises of discussions between the organizations that specialize in debt settlement on part of the borrower and the lender to lessen the total loan to a smaller quantity. Mostly, the lender and borrower decide on a certain percentage of the overall unpaid loan to be forfeited by the lender. But, debt settlement cannot be carried out for all kinds of loans. Uncollateralized loans that are not pledged by real assets like vehicle or a house may not be forfeited. Mostly, debt settlement is carried out by institutions that specialize in debt settlement or legal advisors who help lenders in negotiating debt settlement (https://www.lifeoncredit.ca/getting-out-of-debt-get-a-chance-with-debt-consolidation-loans/). As a compensation for the assistance, these institutions demand large payments in the shape of a fraction of the overall loan or a fraction of the loan money forfeited, plus a beginning registration fee and periodic payments are to be paid by the borrower.

Although debt settlement appears to be the best lawful answer available to past due installments, it is not free from drawbacks. After the settlement of debt it may take a few months or a few years to be approved for unsecured debt such as credit card debt or medical bills. Even after debt settlement takes place, it is reflected in the debt scores thus decreasing the debt standing of the borrower. On the other hand, if the lender promises beforehand to give a ‘paid in full’ letter, debt settlement may not influence the debt score.

Since debt settlement companies usually take money on a monthly basis and put the money in a trust account until a lump sum payment could be made to the creditor, the settlement process may take a few years. During this process the interest and fines may keep on accumulating and the installments may get bigger and bigger. The lenders may also seek professional help to claim the owed money or may prosecute the borrower so as to regain the advanced loan. As the debt settlement institutions demand a lot of compensation for their work and because of the prolonged settlement time, most clients pull out of settlement. After a few years of making payments to the settlement companies, clients may still be in the same position as before since most of the amount saved goes to the settlement companies as service fee.

Lending Criteria for Consolidation Loans

A secured loan is one option for borrowers, and they are usually offered a lower interest rate and a longer repayment term. Depending on the type of loan, some form of security or a co-signer may be required. Another option is to consolidate high interest credit cards to avoid interest charges. Financial institutions offer various […]

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Balance Transfers and HELOCs for Debt Consolidation

Borrowers use different methods to get rid of debt, including settlement, negotiation with creditors, and consolidation. High annual fees and interest rates are two reasons to consolidate credit card debt. There are many reasons why borrowers get into debt, including gambling, underemployment, complicated divorce, and others. Consolidation is a good option for customers with credit […]

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