Today, more than ever before, individuals are struggling to pay their credit card debt. While it doesn’t help that many banks have jacked up their credit card interest rates along with decreasing the amount of loan applications, nonetheless having credit card debt in this stressed economy can wreak havoc on individuals and families alike. The question most people are asking is: How to settle with credit card companies? Here are some tips to help you cope with debt in the short term and the long term.
Contact the Credit Card Company
If you are knee deep in debt and find that you are making late payments or cannot meet your monthly bills, contact the credit card company or companies. Ask them if they will lower your interest rate. In most cases, they will do so because they don’t want to lose your business.
Pay Down Your Debt
There is a way that you can pay down debt by using the “snowballing” method. How does this work? Make a list of all credit cards with the highest interest rate to the lowest interest rate. Double up on the first card with the highest interest rate until the debt is paid off. Then use the money you were paying for the first credit card and apply it to the second credit card on the list. Continue this method with all the cards on your list, and soon you will find that you will be debt free.
Cut Up Those Credit Cards
We live in a society where debt is the rule rather than the exception. Individuals are using credit cards to pay for even the most basic necessities. We have to stop the madness and cut up those credit cards; stop borrowing from one credit card to pay off another; and keep only one credit card on hand for emergencies only.
Use Debit Cards and Prepaid Cards
If you have an account at a bank that offers debit cards, it’s a good idea to use these instead of credit cards. In this way, you will think twice about spending money you don’t have and can’t afford. Prepaid cards are another alternative that can keep you within the budget boundaries you set. You can’t overspend using a prepaid card, and loading it with funds will prevent you from needless spending.
Family Budget
All the experts agree that sitting down and planning a family budget is the most important step you can take to alleviate the financial burdens. Prepare a budget that is realistic and affords you the opportunity to put away some money in case of an emergency.
Bankruptcy is the Last Resort
If your credit card debt is causing you undue stress or if you can’t seem to find a solution, you may want to consider filing for bankruptcy. But this is ONLY is you cannot find another way to settle your credit card debt. Remember, once you file bankruptcy, this action will appear on your credit report for 10 years. There are also requirements you will have to fulfill before your debts are resolved. So think about this action very carefully. Times are difficult and the adage is true – it can try men’s souls – but you have options available to you. Take the initiative and deal with any financial burden you have and before you know it; you will see a glimmer of light at the end of that long dark tunnel.
