Credit Card Debt - Owe it yourself, Pay for your sins! Credit card debts make cardholders poorer every time dues mount up, with no hope in sight. The nightmare begins when you carry large balance and land up paying only a minimum payment, for obvious reasons a high 20-30% APR interest rate takes the toll.
Debt is an incurable disease that eats into your credit status and burn hole in your pockets. Its time to get practical and find ways to get out of this ugly situation. A few companies offer credit card debt elimination programs, but rushing into them will bring create more problems, so do some research to access pros and cons. If it helps you get out of the debts with minimal problems- go for it. The monthly statement says it all- the total outstanding and the ‘minimum amount’ to be paid. There is a great temptation to pay off the minimum amount to avoid embarrassment; little do we realize that the amount includes interest rates, fees and a small fraction of the balance amount. The outstanding amount remains unaffected and debt keeps increasing. Look carefully into other unexpected payments and shoot your queries to the credit card provider. The aim is to reduce the debts.
Paying off the minimum give immediate relief, on the other hand the debts adds up every month, if this continues you will enter the defaulters list and collection agencies will come knocking hard at your door. First put an immediate full stop on the use of the card, hide the cards, leave them home or tear them up. Only make purchases on cash. Take a break wait, for things to get better. This will help you from incurring more damage to our creditability. Make sure you always pay more than the minimum repayments it will lighten the burden of debts, failing to pay towards balance amount may extend your paying schedules- that means paying more. Try and eliminate the debts with the highest interest rates. A tricky situation occurs where you are charged a minimum amount and the funds go towards the payments of the new debts and the outstanding debts still remains untouched. So it is better to pay of the credit cards in time regularly, it will protect your credit rating, it matters when applying for a loan or a new card.
In times like this, seek help of a credit counselor, who will take up your case with the credit card issuers and request a negotiation to settle the balance of your cards, rather than declaring bankruptcy. The company and you come to an agreement where the rate of interest you pay is lowered, if not go for a transfer balance on to a new card. The new card is solely for the purpose of reducing debts and should be restricted to other uses. The other option is to go for a long term loan, best way to clear the credit card debts, paying off the bank on the long term basis helps.
Credit card favors those who pay in time month after month.
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