Relief Debt Systems

Fitch ratings reports that credit card defaults (defined as delinquencies of 60 days or more) reached near record levels during October, for an overall default rate of 4.41 percent. Citing unemployment as the primary cause for struggling debtors skipping payments, Fitch suggests that debt burdened consumers may have a way to go before economic and labor concerns wane. In these uncertain times, eliminating credit card debt is a critical aspect of debt management and financial planning.

Credit Card Debt: Holiday Season Can Create Problems

It can be tempting to fill your wallet with credit cards and head out to the malls or to your computer for online shopping.  Instead of invoking the shopper’s battle cry of “Charge!” take control of your finances by creating a cash based budget, putting the plastic away, and planning your holiday shopping.

 Your Morning Latte and Your Cash-Based Budget

It isn’t realistic to expect consumers to give up all of their pleasures, but cutting back is an important part of paying off your credit card debt. Having a latte now and then isn’t likely to sabotage your budget, but it is important to save for emergencies, other unplanned expenses, and your future. When developing

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For someone struggling with credit card debt, Black Friday can be a scary prospect. Everywhere you look retailers and other businesses are urging you to shop ’til you drop.

People who are looking for credit debt relief should definitely avoid using plastic if they venture anywhere near a store the day after Thanksgiving and throughout the holiday season. Here are four tips to avoid the debt trap.

Stay home. Really. Find some games to play with the kids, do chores, or rent movies (for free at the library of course). Just do whatever you can to avoid going anywhere near a retail establishment. Yes, there are bargains to be found on Black Friday, but it’s not like there won’t be other discounts throughout the holiday shopping season. Use layaway plans. Your may have done this when you were a kid. Though they disappeared for awhile, many retailers have resurrected layaway plans that allow you to choose the items you want and pay for them over several weeks. Use cash instead of a credit card to pay for the goods to avoid taking on debt. Use a debt calculator. Do this

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According to research by moneysupermarket.com, more than three out of ten credit card users aren`t planning to repay their outstanding credit card debt for over six months, headlinemoney.co.uk reports.

The news comes not long after the news that banks may increase the cost of using a credit card – which means borrowers could face higher interest rates and fees.

The price comparison site found that credit card users between the ages of 20 and 29 were least likely to repay their debts quickly, with 38% `content` to hold outstanding debt on their card for more than six months.

Peter Harrison, credit cards expert for moneysupermarket.com, said: “People must be extremely careful about carrying debt on credit cards for long periods of time – you don`t want to be paying for this year`s presents when the Christmas decorations are rolled out again next year; particularly as rates could be at new dizzy heights.”

A spokesperson for Debt Advisers Direct added: “We would advise anyone struggling to repay their credit card debt to contact a professional debt adviser without delay.”

Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements). Read more…

If you are carrying a lot of credit card debt it may be tempting to borrow money from your 401(k) plan to pay it off. But taking money out of a 401(k) can take a bite of your retirement nest egg over time. Here is what you need to know about borrowing money from a 401(k) plan.

Using a 401(k) to Help with Debt

Many Americans who need help with debt have turned to 401(k) money. Many 401(k) plans allow you to borrow up to 50% of the vested balance, with the total withdrawal capped at $50,000, according to SmartMoney. In some cases the money can only be used for a home purchase, medical costs, or education expenses.

Paying Yourself Back with Interest

Generally, you have five years to pay yourself back with interest. Money that is not repaid on time is subject to a 10% penalty for early withdrawal, as well as income taxes. Also, if you leave your job before repaying the loan, you usually have a certain number of days to repay the full amount before it is subject to a penalty and taxes.

The Power of Compounding Interest

Another drawback to taking money out of your 401(k) is that you lose out on compound interest being earned on that money. T

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