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Unsecured Credit Cards For Bad Credit

Unsecured credit card debt is debt that is not backed up by actual assets unlike a mortgage for example, that is debt secured by your home. By definition, then, all credit card debt will qualify as unsecured. Because credit cards have been so easy to get and interest rates on unsecured credit lines are so high, it can be very easy to accumulate debt and get caught in a cycle that may take a lifetime to escape. There are many ways to get out of credit card debt but the route you take depends on your personal financial situation. How bad is it? If you budgeted better, could your income pay off more than the minimum payments each month? Another question to ask yourself in earnest is, how likely am I going to be able to set strict budgets for myself without outside help…and stick with them?

Unsecured credit card debt consolidation is a tactic used to make your budgeting more manageable by consolidating your bills into a single monthly payment. This tactic is used by companies that offer the two primary types of debt relief solutions, debt management and debt settlement. Each solution ultimately has a different strategy they use to help get you out of debt however, they share the credit card debt consolidation characteristic.

What are the differences? Debt management companies collect a single monthly payment from you and then they turn around and distribute that money to your creditors every month so you no longer pay your creditors directly. Your payment is budgeted to include lower interest rates with the goal of getting you out of debt often within 3-5 years. Debt settlement companies also collect a single consolidated monthly payment from you but they save it in a trust account. When enough money has accumulated in that trust account they the begin negotiations with your creditors on your behalf in hopes of a reduced one time debt payoff settlement. Here on my site,, you’ll find a wealth of additional useful information on these unsecured credit card debt consolidation strategies so you can find the best solution for you.

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Unsecured Credit Card Debt Articles

What Is Unsecured Debt?

: September 21, 2007 9:37 am : Unsecured Credit Card Debt

Basically any debt that is not “backed” by an asset is unsecured debt. When you buy a home, the bank gives you a loan that is backed by the home itself and you sign papers that state should you be unable to pay the bank back, the bank has the right to take over your home in lieu of payment. In that case the bank has foreclosed on your home and will sell it in order to get their money back. Of course this is a last resort for all parties involved and on that can sometimes be avoided through mortgage loan modification to avoid foreclose.

The same is true of your car when you take out a car loan. These are examples of secured debts.

By contrast, when you spend money on your credit card, that is essentially a loan that lasts a few weeks until your credit card bll is due. Those loans are unsecured because you did not pledge to give up anything when you used that card. In essence, all you did was promise the credit card company that you would pay your bill including the extra fees if you pay it late.

That is why the interest rates and fees on credit cards are so high, because they are unsecured debt. It is also why you can negotiate unsecured credit card debt to try and reduce what you owe through a debt settlement program.

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How Debt Settlement Reduces Unsecured Credit Card Debt

: January 15, 2007 9:00 am : Unsecured Credit Card Debt

If you read this article about unsecured debt you will understand that credit cards are promises to repay with nothing to back them up (like a physical asset or other collateral). Because of this, they can be negotiated (like any other promise or contract) should the borrower have trouble living up to thier obligations.

A debt settlement company acts as your negotiation agency and will attempt to reduce the amount of debt that you owe by negotiating with your creditors. There is a standard debt settlement process that you will go through on your way to becoming debt free.

Debt settlement companies can usually get your creditors to legally accept less than you owe them – sometimes up to 65% less but the results vary widely based on which company you use, your income, and your ability to remain on the program set up for you.

Given your inability to repay everything you owe, your creditors are happy to get at least some of their money back on past due accounts so you end of paying less than you originally owed.

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