The day you get your first credit card probably seemed like an important milestone. A short time later, you realize you now have several cards that are all maxed out. The minimum monthly payments are killing your budget, and your credit score is taking a hit. You are left wondering how you became overwhelmed by credit card debt. This article looks at why this happens and what you can do about it.
Bad habits contribute to credit card debt.
Every month, you will get a statement and make a payment (hopefully). But your credit card debt quickly can become overwhelming if you do the following:
- Carrying a balance. Try to charge only what you can pay in full within the next month or so. This could reduce the amount of interest you are paying and keep monthly payments from increasing.
- Make only minimum payments. This tactic might keep your card in good standing with the card issuer, but it will do nothing to lower your balance. Companies set this payment low on purpose, so you will spend more time sending them your money.
- Make late payments. Credit card companies often add significant late fees to your account, which you then pay interest on. It doesn’t take long for your balance to build, making your minimum payment due even higher.
- Skip payments. Similar to late payments, you will incur significant late charges and interest. Some credit card issuers might also increase your APR.
As credit card debt grows, many people ignore the debt, hoping it will go away. But when you reach the end of your rope, it might be time to tie a knot. Facing your overwhelming debt is the first step to finding a way out.
When credit card debt becomes overwhelming, you still have options.
Sometimes you can contact the companies that issued your cards. Ask for alternate ways to pay off your debt. Some companies even allow cardholders to miss a payment, especially if there’s been some kind of triggering event or emergency.
Personal loans can be used to consolidate several accounts into one payment. But if your credit score is low, your interest rate might be high.
Consider paying as much as possible on one account until it is paid in full. Then, pick another account and increase your monthly payment by the amount you were paying on the first card. Sometimes this is called the snowball method of paying your debts.
Credit counseling could help you find ways to deal with overwhelming credit card debt. Their advice may include methods you could not have found on your own.
Finally, bankruptcy might give you a fresh start. A Chapter 7 bankruptcy wipes out most of your unsecured debts like credit cards. With a Chapter 13, you will develop a repayment plan to pay much of your debt.
Learn More About Chapter 7 and Chapter 13 Bankruptcy
Attorney Leslie Craft has the experience you need to deal with bankruptcy. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives. Consultations are free and only take about 30 – 45 minutes of your time. Your options may surprise and even excite you!
To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at email@example.com. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.
Bankruptcy Doesn’t Have to Be a Painful Process.