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Credit Card Applications » News » Other » Help for Debt-ridden Cardholders Sought

Help for Debt-ridden Cardholders Sought

September 10, 2009
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All across the U.S., millions of American cardholders are struggling to pay off their mounting credit debts. In fact, the average household owes a little more than $9,000 in debt to card companies. A growing percentage of families are also becoming increasingly dependent on credit cards for their basic needs. This has prompted many financial experts and analysts to reiterate their calls for better fiscal management and increased awareness among the cardholders.

The economic slump and the severed credit crunch have also forced many card issuers to slash credit limits and raise fees in anticipation of more losses. As a result, millions of cardholders have to contend with more expenses and higher debts. The credit line cuts have also resulted in significant credit score reductions because the consumers' debt-to-limit ratios have increased significantly.

However, some steps can be made to mitigate rising credit debts. These methods are often considered as some of the best solutions to debts incurred through credit cards. Experts warn, however, that not all cardholders can avail of the same methods. Some methods are best suited for a consumer who's financial and debt situation can be remedied by a particular solution.

The first solution, called debt consolidation, is one of the most popular debt-reduction methods among consumers. By consolidating all existing card debts into a single monthly payment system with a lower interest rate, cardholders can save money by paying relatively less for their outstanding balances. Consumers have to aware, of course, if the current average interest rates of their cards are higher than those of the debt consolidation plans. For cardholders with substantial debts, however, a debt consolidation loan may be the only solution. They can then take out a personal loan with a lower interest rate to pay off their outstanding balances in a single payment. Cardholders will then have to contend with paying off their loans, though with much lower interest rates.

Another hands-on approach to credit card debt reduction would be consumer credit counseling. Cardholders with considerable debts can consult financial experts and advisers to help them rein in their spending and take charge of their finances. Consultants would often assess the financial situation of the consumers and develop a monthly budget that would serve as a guide for the cardholders.

The last method, debt settlement, involves the presence of an arbitrator to act as an intermediary between the consumer and the card companies. Debt settlement companies would often negotiate with banks and card issuers to reduce the debts owed by their clients by 50 percent or in some cases, as much as 75 percent. The goal of debt settlement goes beyond reducing monthly payments. In the end, cardholders may get to pay only a fourth of their original debts.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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