7 Tips For Paying Off Your Credit Card Debt
- Know exactly what you are dealing with. ~ List each credit card that you own and each customer support phone number beside the name of the company. Whether you are one payment behind or two years behind on your credit card payments, you should know the exact amount that you owe, who you owe this amount to and what the interest rates are for each credit card that you hold. This will be a painful process due to the fact that you are no longer ignoring the reality of your debt.
- Cut each credit card into tiny pieces and throw them in the garbage. ~ This is the only way to not use your credit cards if you still have a balance on any of them. Don’t even keep an “emergency” credit card around. Pretty soon, the emergency will be in the form of the latest Chanel handbag!
- Reassess your budget. ~ Being you have missed a payment or two of your credit card bills, you have got a budgeting problem. Find out where all your money is going. Do you have a job? Are you receiving government assistance? What are the main expense priorities in your life that are causing you to miss payments on your credit card bills. Do you have enough money to at least make the monthly, minimum payments? Know where your money goes and start really keeping track of your spending habits.
- Cut all unnecessary expenses and try to reduce expenses towards essential things. ~ Food is important. Rent or house payments are as well. But, do you absolutely have to spend as much as you currently do on these things? Can you move into a smaller apartment? Can you sell your car and take public transportation instead? Can you make it on fifty dollars worth of food and toilet paper for one week? These are all important and necessary questions for you to ask yourself right now. Is getting out of credit card debt and back on the financial straight road as important to you as you say it is? Giving up some things for a short period of time is better than giving up your chances of actually buying a home or new car someday because of your abysmal credit history.
- Seek out credit counseling. ~ A credit counselor will help you decide what is the best route to take when it comes to payment assistance. The counselor will assist you by contacting the credit card companies involved and may be able to get their in-house payment assistance for you. Some of these programs include hardship programs, debt management plans and forbearance.
- Settle your debts by agreement with the credit card companies. ~ Debt settlement should be one of your last resorts of action. When settling the debt between you and the credit card companies that you owe money to, they agree on a certain percentage of the full debt that you will have to pay before forgiving the rest of the debt. This leaves you will a smaller bill but this also reflects poorly on your credit report. After taking this action, you will have a difficult time getting credit in the future.
- Declare bankruptcy. ~ This move is, by far, the very last resort that you should possibly take to become debt free. Even though all of your current debts will be forgiven, the chances of you being able to buy a house or car with any type of credit are incredibly slim. This move also reflects badly on your credit report. Depending on what your income is and your ability to make any payments toward the debt, you may have to pay at least something toward it.