Lately, you’ve started to notice a peculiar thing; each month that goes by it seems that money is getting tighter and tighter. You also notice that more money seems to be going toward credit card debt payments. STOP! LOOK! and LISTEN! If you didn’t catch that, it was a warning sign; a financial warning sign, a sign that you may be carrying to much debt.
The less expendable income you have the more you will be tempted to use credit to get through the month. The more you borrow from your credit cards to get through the month, the larger your credit card payment will be next month and the less expendable income you’ll have. As you can see, and you may very well be experiencing first hand, it starts to become a vicious cycle. The less you have the more you use, leaving you with even less. That’s how debt works - in particular credit card debt.
At this point, it’s still feasible to use debt consolidation as a solution to your debt problem. Debt consolidation is a major plus in a situation like this, because it gives you the ability to payoff several credit card accounts, which looks really good on your credit profile, plus your overall debt repayment becomes manageable. You end up with just one payment, hopefully at a decent interest rate, and your back to having some breathing room as far as expendable income goes.
The thing to do at this point is to establish a spending plan or budget and stick to it. Put as much additional income as you can towards paying off the debt, but don’t short yourself, so you wont be tempted to use credit to make up the difference. If you begin to use your credit cards again, you are defeating the purpose of consolidating your debt, and could end up in a much worse place than you were.
Consolidate your debt, create a livable financial spending plan, stick to it and don’t incur any more debt, that’s how you do debt consolidation the right way.
Debt Consolidation The Right Way
Posted by DL | 4:13 PM | Consolidate your debt, credit card debt, Debt Consolidation, financial spending plan | 5 comments »
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Another advice would be to lessen your expenditures. Try to tailor down your budget to the things that are really in need like groceries, gas, payments for bills, etc. Buying things that are not needed much will just add more to your credits - especially those things that are beyond your income. Save money and pay your bills on time.
Well put my dear, I couldn’t have said it better. Thank you perpetualbliss1519 for your comment; please ad your name at the end of your post next time so I know for sure whom I’m thanking.
Kind regards,
DL
You can try to pay your way out of debt, but the result is inevitable. The system is deliberately designed to make you fail. It uses the credit reporting system to manipulate you into paying, then your ego, and fear of being sued.
Let me tell you this, if you are not paying the balance every month, you will inevitably fail, lose all of your cash, have very bad credit, etc.
A. As if you didn’t already know, the consumer credit system is rigged in favor of its investors, not its customers. By changing your perception “debt” you will see your way out and new opportunities.
B. Understand that credit card payments are cash flows to creditors, and in many cases, securities that are purchased everyday. That is, you can buy them via the stock exchange.
C. If you have debt, let’s say credit card debt, you got that money legally. The longer you keep it, the more it benefits you. There are laws that make this easy once you have the knowledge.
D. The interest rates charged by creditors tell you when to stop paying, when your risk is too high. We’ll discuss something creditors refer to as “universal default” and how it can be used to lower your risk to creditors.
E. The same habits of borrowing and spending that got you into debt will not get you out of debt. Getting out of debt requires new thinking and new habits.
1. More Debt is Inevitable
The banking system has created a deliberate economic cycle with consumer credit cards. They profit at each stage, it goes like this: They originate (counterfeit) “money” for your credit account. This is based on your credit history, and the better your credit history, and the longer you continue paying, the more credit accounts you can have. This cycle continues until you are not able to continue paying on their terms. Then your credit score goes down and your interest rates and payments increase.
Eventually you no longer benefit from the use of these credit cards, are unable to use them, will have no more available credit and then find yourself in a collection process. Unless you pay your credit card balance in full each month, you are inevitably caught in this cycle and it will take its course.
Settlement, bankruptcy, counseling and consolidation are all part of the same system, to induce you to continue paying in some way. The more payments that the system can get from you, the more valuable are their cash flows (receivables) and the more dividends they can pay to shareholders.
The statistics show that if these methods help you get out of debt, in nearly every example, you will need to give up all of your cash and you will still lose your credit history or borrowing power. The alternative is that the bank simply obtains a judgment lien and then begins taking your income, property and assets involuntarily.
The bank profits from day one, they sell an interest in your credit account to investors, they have it insured and if you don’t pay, they claim it as a loss and the tax payers pay for it (us) and then sell the value of the account to a third party collection firm who tacks on huge fines, penalties and attorney fees.
Remember that all of these systems, programs or services that people believe will get them out of debt were created over many years by many thousands of attorneys working only for the benefit of the credit and banking system. Your financial well being has never been in their plan.
Many people will tell me or believe that they don’t have debt problems, even if they are not paying their balances in full each month. They say they have a job, or two jobs and can easily make the minimum payments, oh, and that their interest rates are very low.
A business practice known as “universal default” changes all of this, because if this person is late on one payment, for any reason, maybe he forgot, was out of town, didn’t tell the bank about his new account number, whatever, the credit reporting services notify all creditors that there was a late or missed payment and immediately, all interest rates jump to usually 29% and 39%. Almost always, this is a disaster and that’s party why I say that “more debt is inevitable”. The system is designed for you to lose, and this is just one way of insuring that.
During and following my experience with debt, I learned some very important lessons that I would like to share with you:
1. The “debt” I thought I had was actually tax free money that I legally received from my creditors.
2. My creditors already factored into the “loan” the chance that I would not pay the balance in full someday.
3. My creditors were very sneaky, they didn’t tell me that they had a license to create money from nothing and call it a loan, as if they lent their own money when they really did no such thing.
4. Instead of paying creditors first with my available cash, I could invest my cash into assets that could later be used to pay creditors, either my current creditors or future ones.
5. After my creditors were paid, I would still have my cash and assets working for me.
6. After six years of applying my new knowledge
I became a millionaire and just a couple of years after that, I had acquired a net worth of over five million dollars!
The most powerful message I can give you about my experience and what I’ve observed with tens of thousands of success stories is captured in my new dialogue, What Would Your Attorney Say?
John Gliha
john@johngliha.com
http://www.johngliha.com
Blowing the Whistle on Credit Card Debt
Well-done John! Thank you for that great post and the very insightful information. Bravo!!!
I was told that handling debt on my own was the best way to handle debt. Would services from http://mydebtrelief.com/ for example be better than doing it myself?