Help for Credit Debt
- There are times when it pays to work with financial professionals to help alleviate your credit card debt. If you already work with a financial planner or certified public accountant, that's your best choice. You already know that you can trust these money experts. Sit with these professionals to come up with a plan to reduce the amount of revolving debt that you are carrying.
If you don't regularly work with a financial planner, a credit counseling agency might be a good choice. Be careful, though; you only want to work with reputable companies. The credit counseling field, unfortunately, is filled with scam artists who will take your money and then do little work on your behalf.
How can you spot a scammer? First, be wary of working with any company that charges rates that seem too high to you. Secondly, don't work with any counseling agency that promises you that they can eliminate your debt quickly. Reducing credit card debt is rarely an easy or quick process. It requires sacrifice on your part, something that any reputable credit counseling agency will tell you.
Fortunately, there is a list of credit-counseling agencies approved by the U.S. Government. You can find it at the home page of the U.S. Trustee Program run by the Department of Justice (See Resources). Simply click on your state to find approved counselors in your area. - You don't have to work with outside financial professionals to cut down on your debt. There are several steps you can take on your own.
First, stop paying just your minimum payment each month. That's what the credit card companies would like you to do. That way, your interest keeps building every month, and the credit card companies get more money from you. Instead, try to double your minimum payment each month. You can cut the time it takes to pay off your card balance in half this way.
Secondly, pay your credit card company two smaller payments each month. By doing this, you cut down on the amount of interest you'll pay during the life of your debt.
Finally, if your revolving debt is so bad that you fear that you can no longer pay your monthly minimum balance, call your credit card company. The company may be willing to forgive some of your debt. It may be a difficult call to make, but it's certainly an important one. - None of these tips will matter, though, if you continue to run up your credit-card debt. Every time you pay for a purchase with your credit card, you make it harder to pay down that debt.
Learn to live without your cards. If you can't afford to pay for your morning coffee, skip it rather than put it on your card. It's a hard habit to break. But once you do, you'll be that much closer to living a lifestyle free of credit card debt.
