There are plenty of ways to eliminate credit card debt out there and while none of them are fun, some are right for certain situations and others can put you in even more trouble than you started with.
Instead of relying on a commercial or agent to SELL you a solution to your debt problems, consider your specific needs and then contact the respective agencies that really are qualified to help you. There is no such thing as debt that is unfixable, but choosing the wrong solution may prolong your debt experience by months or even years. With the way interest rates and fees are structured these days, we all know that time is money so the sooner debt is eliminated the better.
Early Debt Problems (Before you Miss a Payment)
Those who are teetering on the brink of debt sometimes feel anxious or unwilling to contact their creditors. It may be due to anticipated backlash or the hope that your situation is temporary. There is no reason to be scared – your credit card company is probably unwilling to listen to you anyways. They’d like to wait until you miss some payments so that you will have to pay more back but don’t let them play this hand. Contact them aggressively and keep records of all communication. Figure out ways to reorganize payments or temporarily lower rates before you do end up missing one. If you get it through their heads that you will not be able to make any payments without a change they’re likely to change their attitude.
Medium Debt Problems
If you are already in a situation where your credit card balances are already racking up, then there is no time to waste. Each time you miss a payment your credit score goes down, and payments in other areas of your financial life may additionally rise. Pay off the cards with the smallest balance first, or if all balances are similar pay off the card with the highest interest rate. As soon as one card is taken care of, you will have those monthly payments available to pay off your other debts in addition. It’s a slow process and a delicate balance but it will certainly pay off in the long term.
Credit counseling may be of service to somebody in this state of debt. A trained agent can be invaluable when it comes to figuring out ways to eliminate credit card debt. This is great if you got into this situation because of an inability to stick to a budget or manage several different cards. A counselor may refer you to a debt management program (DMP) depending on the severity of the problem. In this case, you will pay a single monthly amount to professionals who will distribute it accordingly.
Extreme Debt Problems!
In the case of somebody who already owes thousands of dollars and have passed the threshold of prevention measure, there are some extreme actions that may be taken. Debt settlement may be a great option if your credit counselor has run out of options. In fact, the more you owe, the better the chances your settlement will work out in your favor. They’re more likely to take something than nothing at all, so if you are close to bankruptcy state it clearly. Bankruptcy is a huge step to make since it stays on your credit report for ten years, but hopefully you won’t have to take it that far.
Cooperation on your credit card company’s part ensures they will get payment, while cooperation on your part ensures you won’t go broke.
Don’t feel the need to go this alone: there are plenty of non-profit agencies out there to give you advice or even a hand. There are so many ways to eliminate credit card debt that it’s almost impossible to find all of the information in one place. No situation is a helpless one if you have the right tools.
We of course, also recommend taking the time to learn smart and sound credit car negotiation tips and advice!
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