There are a million bankruptcies year after year the cause is credit card debts gone awry. Credit card owners dont realize that banks approve their credit cards and also establish their credit limit. The bank puts the applicants information – name and signature – to be the downpayment for the cards funding. Therefore, it is the customers own money.

Financial institutions such as banks and credit card companies claim that they are lending money but technically you, as a client, pays for your share because of the investment.

Here are a couple of secrets well let you in so that you can save yourself just in case you find yourself in a credit card debt dilemma.

1. Banks do not go to trouble with IRS and lawsuits, at least not as much as an individual. In fact, they can easily hire the legal assistance they need to sue a client who stopped paying their credit cards. But well give you an advantage with regard to this matter.

For example, you are in a program where you have to pay for an estimated four to six months. Instead of this, you can pay off the debt with your own assets that are under a federal constructive trust. Technically, this makes you the legal beneficiary.

All you have to is to make a transaction in order to put a lien on your account, therefore changing your status legally to First Creditor. It was originally Debtor. That position can actually deduct the national debt because you are eradicating your credit card debt. The bank gets assets which you had already transferred by wire between accounts. This is legal because you have already fulfilled your contractual obligations and your credit would not be damaged.

In face, you can also keep your card and continue using it. Then continue discharging it. Besides, they are your own assets. You paid for them in the first place.

This is only one of two approaches in eliminating credit card debt. This process is successfully used against the IRS. It is non-adversarial.

The second approach is this. Learn how your bank works. After you discovered the truth to where your money goes, you may be caught off-guard and maybe even a bit upset. But you can make the most out of this discovery.

Most banks usually offer a program that provides more than debt elimination. These are tools that will take back your liberty and control as your own person. In fact, some feel that their dignity is even taken away. When you are bankrupt, it requires you to admit to yourself and to others that you messed up your budget.

The debt elimination program allows you to get back your freedom and your power. Some have lenders pay for the programs by using their own credit cards in order to pay for the fees. It will come to the point that you do not owe anything for the program.

Credit card debt elimination processes require commitment, clarity and organization in order to take back your sovereignty as a client who started up his own account with his own money in the first place.

Benefits

Credit card debt consolidation lowers your monthly payments, which means that you will be paying out less each month than you have been. This is great news for those people with high monthly bills. You will have more access to cash and be able to apply that money either to the principle of our debt or to other needs.

The American Express credit card would be the only card you carry. So you would receive only one statement each month. If you are paying forty dollars on three credit cards right now, then you pay a total of one hundred and twenty dollars each month. A lot of that money goes to pay off the interest you are accruing on each card. So the principle balance keeps growing. When you transfer your balances to American Express, you are only responsible for the one payment each month. If this payment were forty dollars, for example, you would have freed up eighty dollars. Using this eighty dollars to pay on the American Express bill and therefore on the principle balances of your other cards is advisable, but not necessary.

Your credit card debt will disappear a lot faster if it is not accruing interest and growing in size each month. With the American Express card, the credit card interest is suspended for six months, offering you a grace period in which to catch up with your bills. You will also receive no interest on any other credit card purchases you make in the initial interest free time period.

In addition, by transferring your debt to an American Express credit card, you will get a better interest rate. The basic American Express credit card offers an interest rate of 4.99% on your balance transfers. This low rate takes effect after the six month trial period ends. It also lasts for the life of the card, meaning that it is a fixed credit card interest rate.

Drawbacks

There are some drawbacks to transferring credit card debt onto one card with an interest free trial period. You must remember that the interest will go up after the trial period is up. Be prepared to pay on the interest you accrue and have your debt disappear at a slower rate once the interest sets in. For purchases, your interest rate will continue to climb if you are late with payments or go over your credit limit.

How is Consolidation Helpful for Credit Card Debt Solutions?

Debt consolidation involves bringing all your loans together under one roof so you are only paying one bill each month. This helps with credit card debt solutions in two ways; first, its easier to keep track of what you owe as you are only paying one monthly bill; second, consolidation is one of the most effective credit card debt solutions because it will often usually lower your monthly repayments as well as making them easier to keep track of.

How Should You Consolidate Your Credit Card Debts?

Consolidation is becoming one of the most popular credit card debt solutions. But which option should you choose? Should you go with the ad in the local newspaper? Should you hunt down the lowest APR available?

Youll no doubt have seen countless credit card debt solutions. Each one seems more attractive as credit card companies try to entice you to place your debt with them.

A Word of Warning

The annual percentage rate (APR) that you are quoted in ads and on application forms – and which make this seem like the greatest of all credit card debt solutions – will probably only be a short term offer. 0% APR sounds great when you are looking for credit card debt solutions, but will it look quite so great in six months time when it has escalated beyond the competitors and you are now tied in to this one of many credit card debt solutions?

You need to be careful when choosing between credit card debt solutions. Make sure you find out what is the introductory APR, for how long that offer lasts, and then what the standard APR is that you will be paying for most of the time on your credit card debt solutions.

Dont Go for the Quick Fix

Introductory APR offers may leave you with an initial feeling of relief as your monthly payments are reduced in these credit card debt solutions. At least that way you might be able to stop your mounting debt, which is why the 0% APR is attractive. However, if you are to find the best option among all the myriad credit card debt solutions, you need to evaluate the standard APR much more closely.

The standard APR is how much interest you will be paying on your credit card debt solutions after the introductory offer expires. You may find that you are in fact paying higher interest on these repayments to compensate the credit card companies for their seemingly generous introductory offer.

It might depend how large your debt is as to which of the credit card debt solutions you go for; if your debt is small, it could be paid off within the introductory period so a low introductory APR would then simply be what you are looking for in terms of credit card debt solutions. If so, you need never worry what the interest rate would rise to after the introductory offer has ended.

Using a prepaid credit card is a beautiful thing. Very simply, a prepaid credit card is one that you make a payment on before you spend money. However much you put onto your prepaid credit card becomes your spending limit. A deposit of one hundred dollars onto your prepaid credit card will limit your spending to that amount.

Sound restricting? In some senses, having a prepaid credit card instead of a regular credit card is restricting. You can no longer go out and spend money on anything and everything that catches your eye. Careful consideration must be given to each purchase because of the limit that your prepaid credit card imposes on you. In that way, a prepaid credit card is absolutely a restriction on your spending. On the other hand, a prepaid credit card gives you great freedom.

A prepaid credit card gives you the freedom to clearly set your own spending boundaries and to enjoy shoppping within those boundaries. For anyone who has ever gotten in trouble by spending too much, a prepaid credit card can be your ticket to enjoyable and risk free shopping. It can be very freeing to know that you can spend a certain amount of money and not have any consequences to deal with later. A prepaid credit card makes shopping fun and enjoyable because you know that you have already paid the bill.

Still not convinced? I challenge you to try exchanging your regular credit cards for a prepaid credit card for the next six months. Sit down and create a budget for yourself. If you need help creating a reasonable budget, get some. Having financial freedom is worth any amount of initial work it might be. Once your budget is created, put the designated amount of money on your prepaid credit card. Then shop away, knowing that each of the purchases you make is within the boundaries that you have established for yourself. I guarentee that after six months of this kind of restriction you will be more free with your money than you’ve ever been. Trust me. Get a
prepaid credit card today.

Use Introductory Offers to Your Advantage

After the holidays many credit card companies release special introductory rates to entice new customers to apply for their cards. If you can find one that offers 0% interest on balance transfers for a year, youre in! You can transfer your holiday debt from the various cards that you used, and pay it off without hefty interest rates. Another benefit of this technique is the fact that youll have a single payment even if you had used several credit cards for holiday shopping. Once you combine all of them on the new 0% balance transfer credit card, youve got a single, monthly payment! (You might consider closing some of your other credit cards).

If you are unable to find a 0% interest rate on balance transfers for twelve months, you might be able to find a six month introductory offer. This is still worth the time and effort to transfer your balances as you can work to pay them off before the six months is up (or at the end of the six months move the balance to a new card with a 0% balance transfer offer!)

Credit Card Checks

If you dont qualify for a 0% interest introductory balance transfer offer, you could consider using the checks that often come with your credit cards. (Sometimes you have to request them from your credit card company). While the interest rate might not be zero, and it may not be any lower than the card that offers the credit card checks to you- if you have balances on several credit cards, writing a check to pay off each card means you would only have a single monthly payment. In the long run, you would save immensely on interest and finance charges by having a single account. In addition, paying on a single account instead of three or four (or more!) will help you pay off the outstanding balance much faster.

Request Lower Rates

In some cases, credit card companies are able to lower your interest rate just because youve asked them to! It certainly doesnt hurt anything to pick up the phone and call your credit card companys customer service line to request a lower interest rate. When youve gone overboard with your holiday spending, you can really save on the total amount you end up repaying just by having a lower interest rate.

Get A New Card

Ideally, you will want a card that will allow you to move all of your other credit card balances onto, and at a 0% balance transfer rate. There are times when you cant get approved for the best offers, or times when you just have more outstanding debt than the offer allows you to transfer.

If this happens to you, you might consider getting a new credit card that will allow you to transfer your entire debt from all of your other cards, and one that has a reasonable interest rate on the transferred balances, so that you can start making a single monthly payment rather than several.