Being heavily in debt can be extremely stressful. It hurts even deeper when you have multiple creditors to deal with at the same time. Some people opt to consolidate debt through a debt consolidation service. But how does debt consolidation work?

You’ve seen the commercials on TV and heard them on radio. That debt consolidation is so heavily advertised in the mass media means one thing, it is good money-making business. And this is the reason you should be careful. But let’s first look at how it works, shall we?

Debt consolidation simply means combining most or all your debts so you now have one payment to worry about instead of several different ones with different due dates. This can be good, especially for your own peace of mind.

When you sign up with a debt consolidation company, you are assigned a credit counselor. The counselor will go through your finances with you and offer different options for getting out of debt, or at least easing your debt burden. These options typically include consolidation.

Assuming you’ve opted for consolidation, all your debts get combined into one and a monthly payment is calculated that is supposed to clear your debts in about three years.

A good credit counselor will also negotiate with your creditors and can often get your interest rates reduced and late fees waived. But this does not happen right away. You have to demonstrate your ability and willingness to keep your end of the bargain. This means making timely payments for at least three consecutive months.

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If you have taken a few shots to your credit report in the last couple of years, and let’s face it – who hasn’t, then you should look at Visa prepaid debit cards as a way to get your financial house back in order. During times of economic duress people get tempted to use their credit cards and usually end up maxing them out. If you are one of these people and are having a hard time getting new credit cards or are looking for a way to avoid further falling into the credit abyss, then you need Visa debit card.

Using Visa prepaid debits cards can be a great way to enjoy all of the benefits of a traditional credit card without the hassles or the cost. With prepaid debit cards there are no fee, interests or penalties because you are the one in control of your spending limits. No one but yourself tells you what to do. This can be a very good thing. And, if you are worried about being approved for a Visa prepaid debit card, don’t be. Approval is fast and easy with Visa’s online application process. No credit checks and no income verification means that you can be up and spending with your Visa prepaid debits cards just as quickly as you can fund them.

Being in control of your own finances will keep you from falling further into the perils of bad credit and with Visa prepaid debit cards you can even start to repair your credit. Since you can’t overspend, you won’t be subject to any more hits to you credit score, especially if you use your Visa prepaid debit card for all your purchases. Showing fiscal responsibility and the desire to get back on track will go far in repairing your credit.

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If you’re one of the millions looking to rebuild your credit out there, you may want to resort to a secured credit card. If you’re already familiar with the cards, that’s great! If you’re not, I’ll give you a quick cliff note version.

A secured card is just like a regular credit card but you’re going to have to place a deposit on the account before you can use it. Whatever you put on the card is what your credit limit will be. For example, if you place $500 on the card, you can only spend $500. The nice thing about these cards are that you still pay your bills like you would with a regular card but if you don’t pay your bill on time, they will dive into your account and take what they need.

The nice thing about these types of cards is that most of them do report to the credit card bureaus. You have to remember that if they don’t report to the bureaus, you’re not going to be able to build your credit up. There are scams out there that you want to look out for such as a card without a major logo. If the card doesn’t have a Visa or MasterCard logo, you’ll want to skip over it right away because you’re most likely asking for trouble.

How do I know if it’s reporting to the bureaus?

This question is fairly simple to answer. What I tell people when they are looking for a card is to call up the credit card company first. What you want to do is ask them all the questions you have and of course, they are going to give you answers that you need. If they don’t report to the bureaus, once again, look for another card because it won’t be worth your time.

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There are several ways you can boost your credit score. You can pay off your debt; transfer your balance, etc. But there is a way that few people think of and that is by using catalogs with instant credit. Using these catalogs with instant credit has its ins and outs and so must be used carefully. Before you use this method you need to know how your score is calculated and what your score represents to potential lenders.

Your credit score is the way a lender measures your risk as a potential borrower. They do this based on your borrowing history. Now an important element of this calculation is based on your outstanding revolving credit. This is known as the credit utilization score and the lower it is the better.

Increase your Available Credit

So, if you can’t pay down your outstanding debt quickly then you only have one other option to improve your credit score and that is by increasing your available revolving credit. This is called using catalogs with instant credit. When you receive the additional credit and it is reported to the credit reporting agencies, your credit score goes up. This may happen in as little as a month or two, which is really fast.

You see getting new credit cards, especially now may be a little difficult but you get the same effect when you use catalogues that offer instant credit. Usually you can only use the credit to buy merchandise from that catalog. That’s ok though, because you are not really going to buy all that merchandise, unless you are required to make a purchase with your membership.

Before you join any catalogs with instant credit, you need to find out whether the company reports to credit agencies. If this is so then your credit score will go up and usually in a quick time frame.

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