There was a time when it was almost impossible to say ‘no’ to credit. In the early years of the century, credit card companies used aggressive marketing techniques to increase the number of people using their cards. They offered 0% balance transfers, rewards, and increased credit limits on a regular basis. It was all too easy to get sucked into credit and become complacent about the whole thing. People spent money they simply did not have, yet, they rarely gave it a second thought.
That surreal scenario came to a stop when the Collateralized Debt Obligation (CDO) Crisis struck. Almost overnight the whole financial environment changed and with it the lives of tens of thousands of people. People lost their jobs, regular income, and even their homes. They were unable to meet their financial liabilities and those defaults adversely affected their credit histories.
No longer were credit card companies ‘knocking on the door’, except to try to reclaim the money they were owed.
Recovery is now ongoing but that does not mean that many people in the Country are not still carrying financial problems with them. They are in urgent need of help, which is unlikely to be forthcoming from credit card companies or the traditional financial institutions, who took a beating in the CDO Crisis and not interested in taking any risks of being exposed once again to toxic debt.
There are immediate problems to address; the main one is developing a strategy to reduce debt levels, which probably means a budget and the self-discipline to stick to it. The number of people whose problems came about through a lack of self-discipline is beyond counting. One simple solution to repairing a credit score, while also limiting debt, is to get a secured credit card. A secure credit card requires a cash deposit which then becomes the line of credit.
A few years ago there was an escape route that is now firmly closed – easy credit with few questions asked. Today’s best escape route – some would say the only escape route – is to use a new breed of lenders. They are online companies that place much more reliance on an applicant’s present day circumstances and future prospects than on what their history of borrowing from banks.
Make the Case
No one will get help unless they can show that they have a regular income and the prospect of that income continuing during the duration of the loan. When a loan is taken out to pay off existing debt that is incurring a high rate of interest, a new loan will often reduce monthly payments. However, many times this comes from taking a new loan that extends for longer than the current debt durations.
If the problem is one of cash flow, that can be a decision worth making as long as self-discipline is applied and followed.
People who write down their monthly income and expenditure will soon know whether they are living within their means. There is certainly nothing wrong is economizing and cutting down on waste, but that alone is unlikely to solve a serious financial problem.
Anyone carrying credit card debt is probably paying a high rate of interest on balances. If it appears that a new loan that pays off existing debt improves things, then the next step is to approach a good online realistic loans lender that will explain the offer, down to the final detail. The application process is quick and simple; online lenders need identity details, income and bank details in order to make a decision on an application. The whole process takes no time at all, and funds will be transferred quickly once approval comes through.
A new loan can be a lifeline but it is essential that there is no divergence from the strategy devised for the future; no credit card spending if that is available, and no spending on things that are not necessities. The signs are that the economy will continue to improve and with it everyone’s prospects. Those in trouble should not throw away an opportunity by losing their self-discipline; patience is the key and times will improve.
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