Before the recession, consumer credit card debt was the highest in the nation. Today, it has become the bane of every consumer who owns a card. With banks raising interest rates, late payments and defaults have become the norm rather than the exception.
If you have credit card debt, here are some suggestions to help you pay down the debt.
1. Make a list of all credit card debt with the highest interest rate card at the top.
2. If your budget allows, double up on payments towards the first card on the list.
3. Once the top card has been paid off, use that same amount to pay off the next card.
4. Follow the same method to pay off the remaining cards.
If you cannot afford to pay off the credit cards, call each credit card company and explain your situation. They may either lower the interest rate or reduce the minimum payment.
Recent reports have suggested that seeking out debt consolidators is not a good idea. They charge a fee and utilize the same process mentioned above. Moreover, this practice will lower your FICO score which, in turn, can hurt your overall credit standing.
Bankruptcy should be the last resort. If you need assistance, talk to family members to ascertain if they can loan you the money to pay off the debt. If you own a home, you may wish to look into a refinance loan. Filing bankruptcy will be listed on your credit report and remain there for ten years.
Finally, under no circumstances should you withdraw money from any retirement fund such as a 401K or IRA. Doing so would incur a hefty penalty.
For information on consumer debt, credit reports, and other resources, check out:
http://www.myfico.com/Default.aspx
https://www.annualcreditreport.com/cra/index.jsp
http://www.ftc.gov/bcp/consumer.shtm and http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm.
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
