Should the credit crisis affect my decision to consolidate my bills?
When it's all said and done, the year 2008 will be known for a global financial crisis, and it's hard not to know why it all happened with the stories constantly flooding the the airwaves and newspapers. Among the major contributors to this global crisis are:
Global inflation with higher prices in consumers’ products and goods (oil, gas, and food).
The collapse of the housing marking and investors losing confidence with subprime mortgage loans, there is increase in home foreclosures.
Bank failures like Bear Stearns, Citicorp, WaMu, as well as large corporations bailouts by the government for companies like the big three US automakers (General Motor, Ford, and Chrysler) and the insurance giant AGI.
Record high unemployment rate with many workers filing for unemployment insurance compensations. With banks unable to offer loans to businesses and individuals, companies are not able to meet their payroll to employees. Massive companies layoff as seen with DHL, Citicorp, and more.
A declaration of global economic recession by economists.
Whether or not you decide to consolidate your bills is certainly a decision that can be affected by the credit crisies. With these credit crisis contributors, it's getting harder and harder for working class people to make ends meet. Bill consolidation can help you do just that.
How can government or communities assist during this kind of credit crisis?
As evident by the large financial corporation’s bailouts of the AGI and US automakers, the United States government and other foreign officials are responding to the recession and trying to cushion the market effects. Congress discussed an economic stimulus package that will help increase consumer spending ad the Feds recently cut short-term interest rates to encourage cash flow in the market. With political officials, corporations, and expert economists focused on the economy, there is some hope that the market will improve. However, these improvement steps may takes longer to trickle down to the masses and general working class of the nation. Everyday hardworking folks are affected by the financial crisis and find themselves looking for creative ways to manage the household finances. For many consumers who have to struggle with the worsening threat of layoffs and companies downsizing, there are few assurances to manage daily financial security. Tough decisions must be made.
What can you do now?
There are steps that you can take now to make sure you're in the best financial position possible given the current economic circumstances that so many people are struggling with.
Consolidate Your Bills
Typical Americans’ households have the following debts:
Mortgage
Student loans
Credit cards bills
Utilities bills (cellular phone, cable bills)
Medical bills
Other subscriptions
It can be overwhelming to juggle all the bills from different creditors. Consolidating bills means combining all of your outstanding debts into one loan with a lower fixed interest rate. The decision to consolidate bills depends on the individual circumstances, but many people choose to use bill consolidation to acheive a lower interest rate, stop harrassing collection calls, and create a real plan for a resolution to financial trouble. For some, it's a glimpse of the light of hope at the end of a dark tunnel. Particularly when interest rates are lowered nationwide in an effort to boost the economy, it may be advantageous to consolidate if the fee is reasonable. Consolidate debt counselors can:
Negotiate with creditors to lower interest rate
Waive or forgive late fees and over the limit charges
Enable individuals to make smaller payment to only one company
Provide affordable payments plans and end date
There are two types of debts consolidate loans:
A loan that is offered to consumers with collateral (i.e. Home or other valuable possessions).
An unsecured debt consolidation loans is when there is no collateral for the loan. This is often at a smaller loan amount.
Protect against foreclosure
The first and best thing to do is make your morgage payments on time. Your mortgage should be your top priority if you're faced with multiple bills to pay - even more important than credit card bills and other unsecured debts. Making mortgage payments on time will go farther to sustain your credit.
Contact your lender immediately if you can't make your full mortgage payment. Lenders are often times willing to work with you on managing your mortgage payments since it's cheaper for them to do that than go through a foreclosure process on your home.
Consider refinancing your mortgage. Often times with a troubled economy comes a lowering of interest rates, which you may be able to benefit from and reduce your mortgage payment.
See if you're eligible for the Hope for Homeowners Program. Effective October 1, 2008 through September 30, 2011, the government has put into place the Hope for Homeowners program, or H4H in an effort to help those falling behind on mortgage payments by refinancing into more manageable loans.
See if you are eligible for a tax rebate
Starting in May of 2008, the U.S. Treasury started sending economic stimulous checks to over 130 million families. Whether you recieve a stimulous check or not depends partially on your 2007 tax returns, among other factors. Families will receive $600 and individuals will recieve $300.
The IRS has additional information on this and other tax rebates.
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As evident by the large financial corporation’s bailouts of the AGI and US automakers, the United States government and other foreign officials are responding to the recession and trying to cushion the market effects. Congress discussed an economic stimulus package that will help increase consumer spending ad the Feds recently cut short-term interest rates to encourage cash flow in the market. With political officials, corporations, and expert economists focused on the economy, there is some hope that the market will improve. However, these improvement steps may takes longer to trickle down to the masses and general working class of the nation. Everyday hardworking folks are affected by the financial crisis and find themselves looking for creative ways to manage the household finances. For many consumers who have to struggle with the worsening threat of layoffs and companies downsizing, there are few assurances to manage daily financial security. Tough decisions must be made.