You’ve signed up for credit cards, spent the money and then the bills started coming in. Maybe you lost your job, got a divorce, or simply overspent your ability to pay. Now what? Credit card debt is a debilitating issue that affects over 60% of America, mostly in middle and low income families of all backgrounds. You built the debt, you want out, and it seems hopeless…but it isn’t. Unfortunately, there is no “easy” way out…it’s going to take work. After all, that debt wasn’t built in one day, it won’t go away in one day; but you have a few options, depending on your circumstances.
If you have more than one credit card, you can eliminate credit card debt by making a payment arrangement with the card that has either the lowest interest rate or the lowest balance. Tackling one card at a time won’t help with the other cards, but it can give you a singular goal that is attainable, usually within one year. Setting up a budget using an Excel spreadsheet will also help you see where your money goes every month. Simply set up a different tab for each utility company, gas and auto expenses, entertainment, and medical care. Include the monthly automatic deductions you have for any club memberships such as AAA or book clubs. Every time you spend money, enter it into the spreadsheet. Do you really need doughnuts every day or would once a week do it? Do you really need 6 magazine subscriptions? How about that cell phone plan, do you really need a Blackberry, or could you reduce your plan back to just a cell phone without Internet? Regular Unleaded is a few cents cheaper than Premium. Little things add up quickly. It should be clear by the end of one month, what you can do without and how much money you can offer the first credit card company you want to work with. Depending upon how much you owe, you could be out of debt in less than 3 years. It’s not an ideal solution, but it can work if you have less than 3 credit cards.
Try using your checking account debit card instead of your credit card and you’ll quickly find out what you can afford in a month and what you can’t — it’s nearly impossible to overdraw a debit card because usually you cannot withdraw what you do not have in the account. For small cash expenses, try withdrawing $20.00 cash on Monday and see how long you can make it last. The earlier in the week that your cash runs out, the quicker you will see how much money you are spending on items you don’t “need” to survive.
Another method is working with a debt counseling company, of which there are many. These companies charge a set fee to help you consolidate your credit card debt and work with the people you owe to get you a manageable monthly payment. Often they can get the interest stopped, if you agree to closing the account.
www.careonecredit.com has a free Debt Management Guide and several options to choose. These options include Settlements (a law firm is engaged to work with creditors to see if they can offer a smaller, total debt repayment plan over 3-5 years), a Debt Management Plan (sometimes interest is stopped or reduced and a consolidated payment is made once a month), or Bankruptcy (if you just cannot pay anything and are willing to give up all credit for up to 10 years). The information is free and a lot of the options can be reviewed at the above website without joining or revealing any personal information. This site claims to reduce a possible 25 years of debt repayment down to 3 years of repayment using their program.
www.freedomdebtrelief.com offers freedom from credit card debt within 12-30 months and a guarantee that there is no fee unless they save you money. This site has a spot that allows you to connect to a representative and talk to them about your issues. They also advise that using their service protects your credit report while they are working with you.
Trying to stop the agencies from stressing you into having a debt-related stroke? Feeling the pressure of daily collection calls? A different kind of temporary option is to use a service that sends letters to collection agencies that have purchased your original debt. Until you have your budget grid built, this may reduce the stress of unpaid bills. This option is pretty handy if you have avoided creditors for a year or more and can risk a little bit of money up front. They have a set fee and representatives that show you what they can do for you and what you can do yourself to clear up your credit report. You still owe the money, but at least your credit report looks better. This service is helpful if you are trying to change apartments or look for jobs that check your credit…it does not reduce your debt. Visit www.vrtechmarketinggroup.com to learn more.
Whether you set up your own expense report, work with a debt consolidation or settlement company, or file bankruptcy, once you get out of debt it is important to stay out of debt. Start altering your spending patterns today and you could be debt free in less than 5 years.
