When you deal with credit card debt and consolidation in Houston, you also begin to deal with issues such as trouble paying your bills or being called by collectors. You might feel fearful or stressed. Many people deal with financial stress at some time in their lives, but there is something you can do. Below are some of our tips on how to deal with credit card debt, including managing the debt yourself, consolidation, and other tips that might be new.

Managing the Debt Yourself

Make more than the minimum payment.

By paying the minimum each month, you are prolonging the time you will have the debt and more importantly, the amount of interest you owe.

Pay off the debt with the highest interest rate first.

Interest owed can build significantly over time. By paying the debt with the highest interest rate, you will be saving money in the long term.

Develop a budget.

Track your spending, and begin by creating a budget based off of realistic expenses. Try to cut back a little where you can, and think about what you can sacrifice. Try to avoid extravagant expenses, and don’t buy yourself a gift reward for your hard work. Purchase items on sale when possible and you will start becoming more conscientious about you actually spend.

Build an emergency cash fund so that when a major expense arises, you won’t have to use a credit card to pay for it. You might also consider switching to using your debit card exclusively, keeping a credit card on your for emergencies only. Never close credit cards with existing balances, because it can put a major dent in your credit score (and you will still owe the debt).

Move your debts around.

Sometimes you can pay a debt with a very low interest credit card, saving you money in interest costs! See if you have any assets to liquidate for the debt – a car, expensive jewelry, a house, or anything you can reasonably part with.

Methods to Help Relieve Debt

Debt Relief Services

Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals. Even leaving bankruptcy aside, it is in the best interest of credit card companies that their debtors at least feel some motivation to continue repaying their accounts and not simply disappear or view those ever growing balances as untouchable. If you have to deal with credit card debt and consolidation, remember that consolidation may not be the best option.

Credit Counseling

Credit counseling is a process that involves offering education to consumers about how to avoid incurring debts that cannot be repaid through establishing an effective Debt Management Plan and Budget. Credit counseling is usually less typified by functions of credit education or the psychology of spending habits, rather credit counseling establishes a planned method of debt relief, typically through a Debt Management Plan.

photodune-6681828-banking-or-credit-card-debt-concept-s-300x200Debt Management Plans

A debt management plan is a formal agreement between a debtor and creditor(s). Debt Management Plans help reduce outstanding, unsecured debts at a reduced level over a fixed period of time to help regain control of finances.

Debt Management Plans are individually tailored based on what can be realistically afforded on a monthly basis. To achieve an accurate figure, an income and expenditure test will establish what monies are coming into the household and what is being paid out. Income and expenditure includes everything, such as rent/mortgage, secured loans, utility bills, and essential living expenses (food & TV license etc.). Once the income and expenditure is completed, the leftover amount is your disposable income which is divided amongst creditors through a Debt Management company.

Debt Settlement Programs

Debt settlement is often confused with debt consolidation or debt management. In debt consolidation and debt management, the consumer makes monthly payments to the debt consolidator, who takes a fee and passes the rest on to the creditors; this way, creditors continue to receive payments each month. In debt settlement, the consumer makes monthly payments, out of which the debt settlement company takes its fees for the legal work or negotiation and payments are paid to the creditor. Unlike U.K. debt management there are no monthly management fees, the debt settlement company may get the creditor to accept a settlement of 40 pence in the pound, but the client pays 50 pence in the pound. The debt settlement company benefit from the extra 10 pence in this case.

Debt Consolidation

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house.


Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.

As you can see, there are several opportunities when dealing with credit card debt and consolidation. While consolidation is a well-known and frequently searched option, there are other routes that could be more beneficial. Make sure you consider all of your options.

Working with a Company

If you’re thinking about working with a company that can help you, make sure you check out our post on credit repair and debt repayment scams in Houston!


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