If you are an avid user of plastic money, you will never remember what Shakespeare said. He rightly said “Neither a borrower nor a lender be”, but little did he know about the widespread fever of using plastic money entirely for luxury and convenience. All of us get carried away about using the credit facilities for the convenience as wished. All goes fine and one thing that does not strike us is the repayment of this used credit. Debt mis-management is entirely self-invited trouble most of the times. Hence, effective debt management appears a dream impossible for many. And then the rush to all these debt management firms is the next step. But why don’t we think, the best thing to avoid trouble is not get into trouble. Therefore, the wisest step would be to “control” your debts to “manage” them. We have listed few ways below to achieve efficient debt management.

Plan your budgets – If you are already debt-struck, you need to curb your wallet on any forthcoming expenses. If you are planning to buy anything with a credit facility, work out on the amount you would need to shell out each month towards the installments. Prioritize your loans. If you have a compulsory commitment towards a home loan, settle that first and then think of any other loan. Luxuries can be put on hold till necessities get settled.

Save & Spend and not otherwise – Always SAVE & SPEND, than SPEND & SAVE. Keep a regular amount of your income aside towards contingency reserves. Keep aside the amount needed to run the month. Keep aside any amount that you are paying on any existing loans. Now, check if the residual is enough for payment of any new loan you are planning to take. If you find yourself in a difficult situation, postpone the thought over to next few months.

Timely Payments a MUST - Debts always multiply themselves! If you have already taken any loans, make sure you pay the monthly installments at any cost. If you have credit card dues, do not relax by paying only the minimum due amount. Settle the full amount each month BEFORE the due dates; else you will be slapped with high interest rates and late payment fees. Else, you’ll pay much more than what you borrowed.

Beware of the terms – Before you plunge into buying something with that big credit, read the terms & conditions clearly and through the lines. Check if you will be pressed with any hidden charges or high default charges later. The offer, like “Zero Interest rates”, may look attractive, but may take an ugly face later. Do not avail any offer based credits or loans. Always remember – “DEBT” should be your last resource and that too only in case of extreme needs. Try and stay away from this ugly side of luxurious life.

Refinance, if needed – Refinance options can also help save huge interests. Check if you can get a lower interest rate to finance your existing loan. You can reduce your monthly outflows with easier refinance options. Negotiate with the lenders for the best refinance options.

There are many other proven & accepted ways of debt control and debt management, that it will be difficult to list them down here. But, all ways point towards a common goal – Control Debt to reduce it. If you follow this rule, you would not turn to any debt management company for advice.

Debt Management Companies – Perhaps this is the last word that any debt laden individual will remember when he cannot use his pennies wisely. All of us know the meaning of “Save for a rainy day”, but hardly few of us follow it. Else, the National Consumer Council’s claim, that 1/4th of the population painfully pays their debt repayments & credit card dues, could easily be rubbished.

It is here the question arises. If we are not experts in managing our debts, then who is it? The obvious answer is the debt management companies, who take that extra effort to plan out your debt schedules and repayments, but certainly for a handsome fee. But, what exactly do they do? The answer is simple! They work out negotiation with your lenders; credit card companies try hard to lower your repayment amounts. They work out a reasonable repayment monthly amount in your interest, rather than huge chunk of repayments, which you would have otherwise paid to these lenders. They also can help in waiving off the huge interests charged by these lenders.
How to choose the BEST?

When you think of hiring an expert to manage your debts in a way to cause you a minimal loss, you will undoubtedly look out for the best debt management company. You ought to consider certain crucial factors before you opt out for anyone. Debt management companies offer temporary as well as permanent debt management solutions. A Google search for the “best debt management company” will fetch you 17 million results! You have to carefully select the best of the lot with a value for money.
Consider these factors:
1.    Are they “Certified”?
When you go for a fee-based service, you deserve the best! Check if the credit counselors of the debt management company are well-certified and well-experienced. They should be certified through the National Foundation for Credit Counseling (NFCC).

2.    Client Confidentiality
The debt management company should maintain a critical amount of confidentiality pertaining to their client’s data. Your credit history and debt details should be maintained with extreme care, as your vital information like SSN, credit card details, bank account details lie with the company. Where identity theft can be a common issue, a company has to have efficient systems and efficient resources to carry out these critical operations.

3.    How much do they gain?
Though these companies work for a fee, it is still important to see that their profit is not your loss. Most of them work in the best interest of the consumers and charge a reasonable fee. Hence, choose a program that works best in your interest, so that you don’t need a “debt management” again. Generally these companies can charge your first repayment amount as their fee with a subsequent fee of up to 15% per month thereafter.

These companies also can help you to build good rapport with your creditors and improve your credit history. Your good credit history can in turn help you get more credit, if required in future. So when you have all the options to set yourself free from these tensions and have these experienced professionals to bail you out of the debt ordeals, just hire them, feel relieved and enjoy your freedom -  because they are the BEST!