By now, you have most likely heard about credit card bills or are probably carrying such financial obligation yourself. There has been a lot of talk regarding this type of bills and the different methods and tools that people can use to pay it off faster. There have also been a lot of talk about the reasons that cause so many people to struggle with this financial obligation. Below, we are going to discuss these topics. However, this is not the only subject that revolves around credit card obligations. There are certain practices that involve the purchasing of credit card obligations by different companies, which basically buy your credit for pennies on the dollar, after which they collect all of the debt amounts from you. First, let’s talk about what credit card debt is.
What is credit card debt?
Credit card financial obligations are quite possibly the most popular type of debt that many people are having real struggles with. Many studies showed that on average, many American households carry more than $16,000 in credit card unpaid balances. This may seem like a shocking statement but it really is not, it is the reality of the modern society. There are many factors that contribute to this financial problem. Starting with the rather unstable state of the economic environment that most people live in these days, and following that up with the lack of budget managing skills that most people have. Poor budget management is always going to lead to all kinds of financial trouble, and credit card bills are just a prime example of that.
Is it possible to get rid of it?
It all comes down to the person’s individual capabilities and the specifics of his unique financial situation. If you are carrying just a single credit card balance, you may be able to pay what you owe rather quickly by simply making a few adjustments in your spendings and focusing on getting rid of what you owe. However, if you are dealing with debt on multiple credit cards, the situation is a bit more complicated. Still, there are many financial tools and methods designed especially to help people who are struggling with multiple financial obligations. Probably the most common method that people use for dealing with multiple credit card financial obligations is credit card financial obligations consolidation.
What is credit card debt consolidation
It is a method for paying off bills on a number of different credit cards by shuffling all the different bills into a single monthly payment. The most popular ways of consolidating bills include:
Credit card balance transfers
This is probably the preferred method for consolidating multiple bills by many borrowers when it comes down to dealing specifically with credit card financial obligations. The method includes transferring all your current credit card balances with all of their terms onto a brand new credit card with lower interest rate. Usually, the goal is to transfer your balances to a 0% interest rate credit card. The thing to be aware of here is that the interest rate on your new card will only remain at its lowest point for a limited period of time. Which basically means that after this period is over, the interest rate on your brand new credit card that has all of your credit card balances will go up to a normal level. It is important to find out how long will the period continue and what the interest rate on your credit card is going to be once that period expires.
Credit card debt consolidation loan
Consolidating financial obligations with a financial obligations consolidation loan is one of the most popular ways of consolidating any type of financial obligations. When it comes to credit card balances, shuffling all of your current credit card balances into a brand new, personal debt consolidation loan is still one of your best shots for getting rid of all the credit card financial obligations that you are carrying. The goal here is pretty much the same as any type of consolidation, and that is to lower the interest rate on your loan and to reduce your monthly payment.
Now that we have discussed what credit card financial obligations are and what are the various ways that you can get rid of it, let’s talk about a rather new phenomenon and that is the purchasing of credit card financial obligations. We will discuss what credit card bills buyers actually are, what they are buying debt, and therefore, why are more and more people interested in the possibilities of buying out their own debts.
What are credit card debt buyers?
When you are carrying old credit card balances and other types of financial obligations, it has become rather common for the original creditors to sell that money that you owe to a third party, and that third party is called a debt buyer. Credit card financial obligations buyers purchase old debts, more often than not for just pennies on the dollar, after which they collect the money that you owe from you. In most of the cases of credit card debt purchasing, the accounts on your debts are so old that the period in which the bill collectors or the creditors have the right to sue you (the statute of limitations) has already expired. Which means that the debt buyers are actually no longer able to sue you for the money that you owe. The fact that the debt buyer is not able to sue you does not mean that the debt buyer cannot try to get you to repay your debt other ways.
Why would people want to buy their own debts?
With the rising awareness of credit card debt purchasing, more people are starting to raise the question – if a third party buyer can buy their credit card financial obligation, then why can’t they also do the same? There are some quite obvious reasons for people to start asking this question, as buying their own debt will definitely bring them a number of benefits, including:
- If you buy your own debt, you would not report a collection account, like a debt collector would do, as this report shows up on your credit score, and you will be able to avoid that.
- If you were able to buy your own credit card debt, you would not add any additional interest if the contract allows you to do so.
- And, of course, you would most certainly not going to sue yourself.
While all of these benefits look pretty good, there are ways that you can get rid all of them even today without having to wait for the purchasing of your own credit card financial obligations to become a viable option. You can do that by resolving your debts as fast as possible. The only thing that is missing is the opportunity to buy your own credit card debts at the price that credit card financial obligation buyers buy such debt for the rights to collect it from you. But the reality is that such basement pricing is only common when financial obligations are resold or when they are older.