Many people that have a lot of credit card debt, who suddenly come into some ready cash from the sale of a property, an inheritance, a sport’s bet or maybe even the lottery, often rightfully wonder if they can save themselves a bundle by paying off their credit card debts early using a lump sum.

The simple answer is “yes” of course they can save a lot of interest by paying of their cards in full, but they can’t go the debt settlement route, which means paying less than they actually owe without affecting their credit ratings.

The reason for this is that credit card companies won’t enter into a debt settlement agreement unless the debtor owes around $10,000 and is also several months behind with his or her payments.

Causing your accounts to become delinquent is what causes the decline in one’s credit rating of course, but if your accounts are already delinquent then it it’s not something that should overly concern you.

If a credit rating has already been shot to pieces, then it wouldn’t be affected too much, whereas if it’s a stellar one, then it would fall to earth with a resounding crash.

If your accounts are not delinquent however, then you’ll also need to consider that along with the drop in credit rating, that there will be penalties, and the inevitable phone calls and knocks on the door from debt collectors.

It’s said that knowledge is power, so if you’ve got money to pay off your debts, or even if you haven’t, then a visit to a debt counselor would be a good step to take, because if the agency is a BBB (Better Business Bureau) affiliated one, then advice will be close to free, and we’re talking about $25-30 after which you should leave the counselor’s office with a much better idea of what you need to do.

You might be told that a DMP (Debt Management Plan) would be an option, and a DMP is basically a workout agreement with your creditors, set up by a credit counselor or debt settlement expert.

The basic idea behind a DMP is that you make one monthly payment to an agency, which then distributes a pre-agreed amount to each separate creditor, and if you go this route then only go down it with a reputable BBB affiliated debt settlement company, most of whom will give you a free consultation.

There’s essentially one downside and two upsides to using a DMP.

A DMP plan typically spans between 36 and 60 months and the upsides are that the creditors accept a lower rate of interest and will report that your payments are being made on time, but the downside is that your credit cards will either be closed, or suspended until they’re paid off.

In the event that you decide to pay off the debts on your own instead of using a debt settlement company or a credit counseling agency, then here are the three most common ways of doing it,

1) Constant Payments On Every Account

The minimum amount that a credit card company requests as a minimum payment will get less every month as your balance is reduced, but the constant payment on every account system means that you continue to make the same payment every month even though the requested amount gets less and less. This is the simplest system to understand and operate but it’s also the least effective of the three.

2) The Snowball System

This system is very popular and very effective, and what you do is to pay the minimum monthly payment on all your accounts, with the exception of the one with the lowest balance, and you pay the most that you possibly can off of that account.

Probably the biggest advantage of the snowball system is that it provides the fastest way to pay off a single account completely, thus giving a big emotional boost in addition to the financial savings.

3) Debt Stacking

This system is undoubtedly the one that works best financially, and if you don’t need the emotional boost that the Snowball provides, then it’s the one that you should use.

It’s very similar to the Snowball system, but you pay the maximum that you can off of the card with the highest interest, and not the one with the lowest balance.

But Please Make Sure that You Have A Nest Egg!

Regardless of which system you decide to use it will be far better than not using a system, but if you do suddenly come into some cash then I’d really recommend that you reserve some of it in case of an emergency.

There are lots of different emergencies that can arise, and they come in all shapes and sizes, a medical or legal issue, a major auto repair, property damage etc. and just imagine what it would be like if you’d used all you cash to pay off debts, and then got laid off and couldn’t find a job.

The author of this article was a film producer, and award winning film sound editor for many years. He has a passion and a flare for economics, and one of his websites -> http://pay-off-debts.org features a large number of highly popular articles about the world’s economy in general, and debts, debt settlement, debt consolidation and bankruptcy in particular.

Shopping with a credit card can possibly lure one to engage in compulsive buying, which is the sort of behavior that daunts one when the bills are presented. While such may not always be the case, it is possible to increase one’s debt owing to urgent and necessary purchase. Whichever is the case, here are some useful tips to heed when consolidating your payment for credit card.

• Conduct a search on the Internet for online debt consolidation companies, which are companies that specialize in finding ways to consolidate debts. In addition, these companies also help those who are on the lookout for personal loans to settle their debts for credit card.

• Meet up with debt consolidation professionals. They can help you in designing plans to solve your existing problems. These plans can help in lowering your payment and your debts.

• Apply for home equity line of credit (HELOC). This enables you to enjoy lower rate of interest while settling your payment.

• Make use of professional advice from a debt relief company. You can find one by checking yellow pages or newspapers. The company can assist you in settling the payment using the most favorable way.

• Try not to use your credit card to settle other debts. Using one loan to settle another debt is not a wise choice. This is because your overall debt may increase if you have other sudden financial obligations.

• Cultivate a habit to save. Whenever possible, you should deposit additional money into your bank account. If this is done repeatedly, you can sense that your saving capacity increases accordingly. This ensures that you have money to settle debts in the future.

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Nearly everyone has a car at a very young age, but there is a lot to learn about what to do or not to do when it comes to your car. Since your car is a depreciating asset, it is important to make the right decisions when buying a car, maintaining your car, and insuring your car. As soon as you take your car off the lot, it immediately loses about 20% of its value, so it is not necessary to invest a lot of money into a car. Here are some tips that will help you save money when it comes to your car.

1. Buy what you can afford.  It is worth saying it again: a car is a depreciating asset. You car can never make you money, at least no where near the money you put into it. It is better to buy that car that won’t get much attention from your friends, but will save you money in the long run.
2. Go for a newer used car. Buy a car that is only 1 or 2 years old, with less than 10,000 miles on it. This way you can get a car that is still in good shape without paying the extra money for it.
3. Do not lease a car. When you lease a car you will never be able to free of a monthly car payment. You also have a mileage limit that could cost you extra money if you go over. And if there are any scratches or dents, that also could cost you more money. Bottom line: it’s just not worth it. Finance a car for 3 to 5 years. Then save the monthly payment once it’s paid off by driving your car as long as you can.
4. Increase your insurance deductible. This is an easy way to see an immediate savings on your premiums. Increase your $250 or $500 deductible to $1000. Your Car insurance is meant to pay for major accidents, not minor scratches and dents. Use the money out of your emergency fund to pay for the higher deductible.
5. Keep your car for longer. The longer you drive your car the more money you save by not having a car payment. For some people that could mean saving up to $300 per month. You can use the extra savings to pay off debt or apply to your retirement fund.

Ann Omoike invites you to find out more ways to save money @ http://www.livingmylifedebtfree.com/99-ways-to-save-money-how-to-save-money.html. Subscribe today for free at http://www.livingmylifedebtfree.com, and receive articles that document my journey to getting rid of all my financial baggage by paying off $20,000 in student loan debt and $80,000 in mortgage debt.