A lot of people spend more money than they can afford
to repay toward their credit card debt. To regain control over your finances
and to manage your debt, here are some solutions you can try.
Create a spending plan.
In many cases, people design and then stick to a spending plan to
get their debt under control. A spending plan is a guide for how
much money you have and how much money you spend. Sticking to a
realistic spending plan allows you to pay off your debts and save
for the proverbial rainy day.
Many universities, military bases, credit unions and housing authorities
operate nonprofit financial counseling
programs. Even though some may be called non-profit, a fee may
be charged for their services.
Creditors may be willing to accept reduced payments if you're
working with a reputable program to create a debt repayment plan.
When you choose a credit counselor, be sure to ask about fees
you will have to pay and what kind of counseling you'll receive.
A credit counseling organization isn't necessarily legitimate just
because it says it's nonprofit. You may want to check with the Better
Business Bureau for any complaints against a counselor or counseling
Bankruptcy is considered as an extreme last resort credit solution. Unlike
negative credit information that stays on a credit report for seven years,
bankruptcies stay on a credit report for 10 years.
Bankruptcy can make it difficult to rent an apartment, buy a house
or a condo, get some types of insurance, get additional credit, and,
sometimes, get a job. In some cases, bankruptcy may not be an easily
When to contact the creditors
If you're having trouble paying your bills, contact your creditors immediately.
Tell them why it's difficult for you, and try to work out a realistic
modified plan that reduces your payments to a more manageable level.
Don't wait until your accounts have been turned over to a debt collector.
At this point, it may be too late. Take action immediately and keep
a detailed record of your conversations and correspondence.
Use caution with debt counceling
Turning to a business that offers help in solving debt problems may seem
like a reasonable solution when your bills become unmanageable.
Be cautious. Before you do business with any company, check it out
with your local consumer protection agency or the Better Business Bureau
in the company's location. One rule to remember is that if a credit
repair offer seems too easy or just too good to be true, it probably
is too good to be true. And knowing your rights can help you steer clear
As you try to take control of your credit card debt, be on the lookout
for advertisements that offer quick fixes. While ads pitch the promise
of debt relief, they rarely mention that this relief comes in the form
Because bankruptcy stays on your credit report for 10 years and hinders
your ability to get credit, it's important to ask for details before
agreeing to any debt-relief services.It's a good idea to check the information
found in your credit report at least once a year.
Since credit reporting agencies don't share files, you'll need to contact
each reporting agency to make sure the information about you is correct.