I'm Buried In Credit Card Debt!

If you're reading this article, you're probably drowning in credit card debt. That's a scary but typical situation. Plastic money is easy to get these days, and high-interest debt can creep up on you very quickly. You are not alone. Our whole society, including the government, is in debt up to its collective eyeballs. You're not a bad person or a financial failure; you just need a plan to get your finances back on track! It's a good thing to recognize that since you're reading this article, you've already taken the first and hardest step: admitting you have a problem. Give yourself a pat on the back for having the courage to face this situation head-on and let's pinpoint the issues that may be causing all the stress.

Monthly Bills Are Just Too Much
Being unable to afford your monthly payments is a clear danger sign, but don't make the mistake of thinking that's the only problem you have. More likely, it's just the tip of the iceberg, overshadowing financial struggles such as a single large balance or multiple credit card issues. If you're this far down the road of financial problems, the dilemma you're in probably started much earlier and went much deeper.

Balances on the Rise
Did you notice this issue sneaking up behind you? You've been making your usual minimum monthly payments, but for some reason, the balance keeps increasing. This alarming phenomenon occurs because any remaining balance accrues interest, increasing your balance each year - perhaps even each month. The minimum payments just aren't enough to pay off that balance. If you weren't already in over your head by the time you noticed this problem, you might very well be soon, if you don't take action now.

You Don't Pay Off Cards
Even though most folks don't treat a card balance as a loan, it's a good idea to do so. If you had a mortgage, car loan, or student loan, you'd probably be concerned if you weren't making progress toward paying it. The same applies to credit card debt. The unpaid loan revolves like a whirlpool, with you sinking at the center. If you never pay off your balance, i.e., your loan, that's a warning sign that you are not handling your money correctly, and you're in over your head. It's high time to become aware of this bad habit and get to work on ending it for good.

Great. We've listed some reasons to stress, now what?

Here are a few tips to assist you in building an action plan aimed at reducing and, over time, eliminating your debt.

Card Tricks
Save the magic tricks for later. Don't overwhelm yourself or bite off more than you can chew. If you have multiple cards with outstanding balances, start by dealing with just one of them. Handling one piece of plastic at a time is not only a smart way to deal with an array of problems, but it will also create short-term, achievable goals to focus on, rather than a single gigantic task that can overwhelm you.

Breaking up the overall problem into smaller chunks will help you see that clearing your debt over time is perfectly doable. Besides, you'll have the satisfaction of noticing real progress on your debt reduction.

It's up to you, but handling whatever card has the lowest balance first is usually the best idea. Put as much money as you realistically can towards it, and you can take in a breath of fresh air when it's cleared. However, if one card has an interest rate that's killing your finances, you might want to attack that issue first and put an end to the way it wastes your resources.

Hey Lender, a Little Help Here?
It might seem brash, or even intimidating, but you might be surprised to find that simply making a phone call to your card's issuer could be all that's needed to get a reduced rate. It's a great option, but it does have a slight catch. Your chance of getting a lower rate is highest if you have a good credit score (730 or above) and you're a long-term customer who's made payments in a timely fashion. If you meet these qualifications, you probably won't have a significant credit card debt in the first place. Still, it's worth a try. You never know until you ask, and shaving a percentage point or two off your rate is well worth the effort! That step alone can easily amount to saving hundreds of dollars per year.

Keep in mind, business is business, and the company most likely doesn't want to lose yours. If a competitor has offered you a lower rate, feel free to "mention it in passing" in conversation with any customer representatives. They might be willing to match their competitor's offer.