Do you have a credit card debt problem? Not sure? Well, if you
take a few moments to answer the questions below then you should be
able to determine whether you have a problem, or are headed for one.
1. Are you finding yourself
just paying the minimum balance on your
credit cards each month? If you are, it may take you the rest of your
life to get out of debt. Or longer (if that's possible). And I'm not
kidding. If you are only paying minimum balances every month then you likely have a
2. Do you have a detailed
plan in place to eliminate your credit
card balance? If you don't, you may already have a problem and at the
very least you are headed for one.
3. Based on the amount you
are paying each month (and assuming you
don't charge anything more on your credit cards) do you know exactly
how long it will take you to erase that debt? Or are you afraid to find
out. Remember, hiding your head in the sand won't make it any better.
I'll show you below what your first step should be. If you answered
"no" to this question you may be in denial to the fact that you have a
credit card debt problem.
4. Have you paid any over
limit penalties within the last 6 months to
a year? Yes? You have a problem.
5. Have you been charged
late fees within the last 6 months to a
year? Yes? Again, you have a problem.
6. Is the interest rate on
your credit card a "default rate"? In
other words have you missed payments and/or gone over your limit more
than once, allowing your credit card company to raise your interest
rate to astronomical levels? If so, I'll show you how to get these
well. If you answered "yes", you have a problem.
7. Are you taking cash advances from your credit card to pay for other expenses such as you mortgage or rent? This is a slippery slope and if you answered "yes", if you do not have a credit card problem yet, you likely will soon.
Depending on how you answered the 7 questions above, you should now have an idea of whether or not you have a credit card debt problem, or are potentially headed towards one. Either way, the sooner you take action, the better. When extremely high interest rates are involved, time is of the essence to solve the problem. But don't misunderstand me. There are no easy fixes and no overnight cures. Whatever path you choose will take some time.
Here are some debt relief options you can consider.
1. DIY - Do-It-Yourself debt relief. Take the time to get a handle on you finances. Crunch the numbers, create a detailed budget and get educated on handling money so that you not only get yourself out of debt, you stay that way. You will also want to call your credit card lenders and negotiate lower interest rates on your accounts.
2. Credit Counseling - Even if you think you can do-it-yourself, it still may be advantageous to speak to a credit counselor about your situation. Initial consultations are free (if they are not, go somewhere else), and they can help you make sense of your finances, and prepare that budget you need as well. If you choose to continue to work with them, the will enter you in a debt management program, whereby they will negotiate concessions from your creditors. These include lower interest rates and the elimination of fees and penalties on your credit card. The goal of most credit counselors is to get you out of debt in less than 60 months. Again, this is not a magic bullet.
3. Debt Settlement - If the first two solutions are not right for your situation, debt settlement (or "debt negotiation" as it is also called), may be your best option. With a debt settlement program, you (or a professional debt negotiator) will negotiate a settlement amount for your unsecured debts which can sometimes be as low as 30 cents on the dollar. The best way to decide between debt management and debt settlement (and to get a better understanding of what is involved in both) is to speak to a debt relief company that offers both programs. This way you will be given advice based on what is best for you, and not pushed into a debt program just because it is the only one a company provides.
4. Bankruptcy - If you are considering this option I highly recommend that you seek the advice of an attorney. Declaring bankruptcy is more complicated and more difficult to do than it used to be. And if you are considering bankruptcy, then this is also a good indication that you might be a candidate for a debt settlement program.
The important thing in dealing with a credit card debt problem is not to ignore it. Get some help if you need it by speaking to a reputable credit counselor.