Credit Resources And Rights To Know For Managing Debt And Finance

Most people find credit cards debts to be unmanageable which is the actually due to their ignorance about their rights as well as the useful and easy ways in which they can achieve their debt goals. More often than not, they end up using their cards too often quickly reaching their credit limit that makes debt management difficult if not impossible for them.

If you want to avoid that route and stay always on the right track while managing your debts you must know a few things such as:

  • Your rights
  • The ways to manage your debts and lastly
  • The credit resources in case you need any debt management help.

Start with your rights

Start by knowing your rights first. On September 23, 2008 the House passed the Credit Card Holder’s Bill of Rights commonly known as H.R. 5244. This is actually an amendment to the TILA or Truth in Lending Act. The primary objective of Act is to establish transparent and fair practices when it comes to extension of credit following an open end consumer credit plan. Some of the primary objectives of the bill are:

  • To protect the cardholders against any arbitrary increase in the interest rates
  • To prevent the cardholders who pay their bills on time from being penalized unfairly or erroneously
  • To protect the cardholders from the gimmicks of due date
  • To shield the cardholders from any misleading terms and conditions of credit
  • To empower the cardholders to set the desired limits on their credit according to their financial condition and affordability
  • To ensure that the credit card companies allocate the payments and credit fairly
  • To prohibit the card companies from imposing any excessive and unnatural fees on the cardholders and
  • To prevent the card companies from offering sub-prime credit cards to those people who cannot afford it.

The bill also requires the Congress to offer better oversights of the credit card industry so that there is a better control over credit.

Debt and credit resources

Now that you know that you have several rights regarding your credit as well as the assurance of the government to have all of those protected, it is time to look at the different debt and credit resources when you want to manage your debt. There are several low cost or free resources that are available to assist you and from different sources as well such as or others. Here are a few:

Debt consolidation:

Just as the term signifies, a debt consolidation allows you to combine a number of debts, preferably the high interest ones, into a single new loan. This loan often comes with low rate of interest and more favorable terms for the borrower. Just make sure that you speak with a reliable financial advisor or a credit counselor to know about the feasibility of taking out a debt consolidation when you want to improve your debt management strategy successfully.

However, there are a few cautions that you must exercise while you consider taking out a debt consolidation loan feasible and those are:

  • You must make a change in your money spending and management habits as only that will help you to reduce your money spending as well as making credit purchases.
  • Assuming that you want to take out a home equity line of credit for consolidating your debts, make sure that you know that you will put your home on the line as this is a secured loan that will need collateral security.
  • Taking out a consolidation loan will look like another new debt on your credit history and this can end up damaging your overall credit score.
  • Consider the total interest cost of the debt as that may increase your overall payment if these are spread over a longer time period.

Therefore, consider all these facts very carefully and think twice before you go on for a debt consolidation loan.

Debt settlement:

If you consider going for debt settlement which is a process to negotiate with your creditors for a reduced payment, you must be doubly sure, careful and considerate. You will come across several offers for debt settlement from different debt settlement companies.

  • Not all of these companies are reliable sources and may not be successful to reduce your debts and come out with a favorable repayment plan after negotiating with your creditors.
  • A few may not even do anything but ask you to stop paying the creditors and take their fees without offering proper service and results thereby damaging your credit even more and putting you further into debt and financial troubles.

Apart from that, most of the debt settlement companies charge very high fees without offering you with any real progress or result in your debt relief.

Speak to a specialist

When you are unsure as to which way to go you must always talk to a specialist and ask for help. Groping in the dark will never let you reach to the other end of the dark tunnel. These expert counseling agencies will help you in a great way in such an emergency and offer you with a large variety of useful and effective services to get you out of the financial crisis.

One such agency is the National Foundation for Credit Counseling that offer low cost and even free counseling services to improve your money management. The different types of financial guidance provided by NFCC include:

  • Debt counseling
  • Bankruptcy counseling
  • Reverse mortgage counseling
  • Homeownership counseling and
  • Student loan debt counseling.

There are also several other resources for help such as:

  • Consumer Financial Protection Bureau is another such agency where you can also file a complaint regarding a financial product or service apart from getting more info about how credit cards work.
  • Federal Trade Commission can help in disputing credit card charges, identity theft, and correcting credit report errors.
  • Identity Theft Resource Center will protect your identity and tell you what to do when it is stolen.
  • Bankruptcy Counseling and Advice administered by the federal courts will provide a lawyer to file for bankruptcy to wade through the long-term impacts.

Choose the best resource to manage your debt successfully.