** Credit Card Debt Relief Tip of The Day **

CNN Money Says DON’T CANCEL Credit Cards

There has been an ongoing  debate over whether or not to cancel credit card accounts as a way to help with credit card debt relief. The old school of thought was that canceling unused cards would help quell the fears of lenders that you might put yourself more heavily into debt if you have unused credit. Also that canceling the cards would take away your temptations to spend.

But CNNMoney.com put out a report on August 24, 2009 that says your credit ratings will SUFFER if you start canceling credit card accounts, especially if they are older accounts. Why? Because older accounts show more readily that you have a track record with credit (hopefully a decent one). Your credit score will actually go UP if you have old credit card accounts (with a zero balance).

Debt to Credit Ratio Extremely Important

It also has to do with the ratio you owe compared to the amount of credit you have. If you have a lot of credit card debt and decide to start canceling credit cards that are already paid off, then your debt to credit ratio is going to rise. The best ratio is 10% or less in the eyes of your creditors and how your credit score is kept.

For instance, if you have $5000 of credit card debt, but your available credit total of all your cards is $50,000, then you have an acceptable debt to credit ratio of 10%. But if you delete credit card accounts, and your available credit total becomes only $20,000, now you have a debt:credit ratio of 25%. That’s a big red flag these days to both lenders and to your credit score.

Actually Open NEW Credit Card Accounts?

So, what’s the best thing to do to help with your credit card debt relief and credit score, according to CNN Money? Pay off your credit cards, but DON”T delete credit card accounts (especially older ones). They actually say that OPENING NEW accounts, while it will negatively affect your credit score in the short run, is actually advantageous to your credit score in the long run (but this is only a good strategy, they say, as long as you don’t need a loan in the very near future).

To see CNN Money’s post on the cancel credit card issue, click the link.

Disclaimer - Remember that the information on this website/blog is by no means official information. While we attempt to be as accurate as possible, the content is largely opinion and entertainment based and should not be confused with official legal or financial advice. If you need help with credit card debt relief, you should seek the advice of a reputable and professional debt counselor. Further, a commission may be paid to the owner of credit-card-debt-relief.org for clicking into other sites through pay per click ads or by purchasing products or services of affiliated websites. (Please Read our Terms page for further info.)

Credit Card Debt Relief Tip of The Day

When Do You Have Too Much Debt?

Credit is one of the few things in life that is both a blessing and a curse. Credit is a very good and convenient way for us to pay for things we need when we don’t have the money we know is coming to us. It can be a curse, however, when we end up putting everything on credit and not being able to repay them on time. It can be easy for debt to pile up this way.

So how do you tell exactly if you have too much debt? Take a look at how much money you owe to various lenders and creditors. You may be able to comfortably make your debt payments currently, but that is not an indication that you have no credit or debt problem.

A Typical Example of Debt

Sneaking Up On You /

Needing Credit Card

Relief

Take for example Betty and John.They basically lived their lives the way they want to. They had a number of credit cards, two car loans, and a mortgage they were repaying. Betty and John were able to make extra payments on their debts. They believed they were doing rather well with their debts. If they wanted something, they simply charged it on their credit card and paid for it later.

And then it happened. Betty discovered she couldn’t work anymore. They were both surprise to discover how much their second income mattered until the next time the monthly bills came. All of a sudden, Betty and John found themselves in a position of not being able to pay their bills. They were better off than most couples, actually. They had a budget and they used their savings to get their revolving debt paid off in just a year. Today, they’re on the road to being debt free completely.

Realize You Have a Credit Card Debt

Problem Before It’s Too Late

Many Americans are not as fortunate as Betty and John when it comes to debt. They are in much worse shape, and in most cases, they realize too late that they have a serious debt problem.

Here are some questions you can ask yourself to determine if you face financial ruin as a result of debt…

If your answer is no to one or more of the following questions, you could be headed towards the path of debt ruin:

* Do you maintain a savings account?
* Are you able to pay more than the minimum amount due on your credit cards?
* Do you use your credit cards only for emergencies?
* Is your income large enough to pay off all your existing debts?
* Do you maintain just one credit card?
* Does the balance on your credit card go down significantly each month?

Red Flag Debt Signs

Answering “Yes” to Any of These Questions May Mean You Have a Serious Credit Card Debt Problem:

* Are you near or at your credit card limit?
* Do you write out checks hoping they aren’t going to clear until you can deposit some money to your account?
* Do you use your credit cards to pay yourmonthly bills?
* Have your cards been declined when you were trying to make a purchase?
* Have lenders denied you credit?
* Have you issued bounced checks?
* Do you avoid phone calls from collectors?
* Do you lie to others regarding your spending or debt situation?

The First Step to Correcting a

Worsening Credit Card Debt Situation

If you want to change your financial situation, the first step is to realize you have a spending and/or debt problem. When you know the extent of your problem, you can being formulation a plan on how you can fix it. Altering your financial situation is not easy, nor does it happen overnight. It takes discipline, patience, persistence, hard work, and making sound decisions. You can turn to companies to help you with your debt problem, but you have to make sure these companies you turn to for help is reputable and won’t put you in even deeper financial trouble.

Disclaimer – Remember that the information on this website/blog is by no means official information. While we attempt to be as accurate as possible, the content is largely opinion and entertainment based and should not be confused with official legal or financial advice. If you need help with credit card debt relief, you should seek the advice of a reputable and professional debt counselor. A commission may be paid to the owner of credit-card-debt-relief.org for clicking into other sites through pay per click ads or by purchasing products or services of affiliated websites. (Please Read our Terms page for further info.)