Free Credit Card Debt Advice – Getting Out of Credit Card Debt
With all the hype about being “indebted free”, many people often wonder if there are any real deals on credit cards that aren’t available to those with good credit. The truth is that most credit cards today, if they’re truly free, don’t make any sense to someone who is in debt. Credit card companies are in business to make money. If you’re currently paying a minimum payment on your card every month and have yet to see the benefit of that debt, it’s time to seriously start thinking about how you can begin to eliminate your debt.
One option to consider is applying for an unsecured credit card that does not require a loan. These cards carry no risk on the lenders and can be a great way for you to build credit while building your savings as well. Remember though, that if you do not pay off your balance in full each month, you will still be responsible for paying the interest and fees. This is where it gets tricky.
When considering unsecured credit card options, the first thing that needs to be considered is whether you have the discipline to be able to pay off your balance each month. For many people, it’s just impossible. The average credit card debtor, despite knowing that he/she is in debt, uses the card to purchase things that he/she will later pay for with that debt. So long before that debt even reaches five figures, you should already have a plan to pay off that debt, if possible.
It’s important to know that even if you’ve been faithfully making payments on a credit card for years, interest will accrue and it’ll cost you money. Most people don’t realize that the interest is not tax deductible, so you should be prepared for that fact. In addition, if you stop making payments on your credit card, the credit card company can send you a cease-charge letter, which means that they will seize any remaining balances.
If this happens to you, don’t panic. Ask your credit counselor what the legal process for filing bankruptcy is in your state. Know that it isn’t a good idea, since bankruptcy is viewed negatively by credit bureaus and your credit score. It can be a long and complicated process, but it can also be lessened by making all your payments on time until the debt is paid in full.
You also need to develop a plan to monitor your expenses. Keep track of what you buy, when you buy it, and how much you pay back each month. This way, you will be able to see which areas of your spending are costing you money and which areas are working to improve your credit score. After all, if you continue to improve your credit score, you’ll have more purchasing power and lower interest rates.
If you find yourself unable to make your payments, call your credit card counselor immediately. Get the problem fixed, and then call again in a few months to see if your progress. It’s a good idea to set up a follow up payment plan. This will help you avoid getting in a deeper debt trap. You will also save money on interest charges because you won’t have as much to pay back each month.
Credit counselors can give you some valuable information about debt management. They can tell you what debt management companies can do for you, and they can teach you how to manage your own finances. Remember, your debt doesn’t have to be overwhelming. You can pay it off easily, if you just work to reduce your expenses and increase your income. It may seem like an impossible task at first, but with the proper guidance, you can get out of debt and start living life debt free. It’s up to you to take action.