Credit Card Debt Advice

Do you even know how much you owe? This is one of the inevitable symptoms of credit card debt that is beginning to get out of control. As balance rise, you will find that the cards being offered will have smaller and smaller spending limits (along with higher and higher interest rates), and debtors in the throes of avoidance rarely sit down to add up precisely what their overall financial obligation may be. Whether on a computer spreadsheet or old fashioned accountant’s ledger, each borrower should spend a weekend recording all necessary data about each one of their credit cards – company information, credit limits, account balance, how much the suggested payments will be and when they will be due, even how long the accounts have been active. This not only prevents future payments from being insufficient or too late, but it should present a more detailed portrait of the current state of your finances so as to allow more cogent analysis of whether or not paying off credit cards through traditional means would even be doable.

Once this has been done, the smart borrower should then cut up the highest interest rate credit cards. Obviously, this will be different for everybody. Some borrowers, through discipline and an eye for savings, may not have any cards about fifteen percent. Some borrowers, more desperate and foolhardy, may not have any cards UNDER fifteen percent. With the information in front of you, find out which cards are the worst offenders and, more than avoiding their use, make sure to pay those down as quickly as possible.

After that, you’ll want to look at the cards offering the lowest interest rates and see what can be done. Generally, these cards belong to more established companies and borrowers tend to have better payment histories and a longer consumer relationship. Talk to their customer service representatives and see what could be done about lowering interest rates even further. You won’t likely be able to actually get them to reduce the balance – the debt settlement negotiation trick is to deal with all credit card balances simultaneously – but most cards will be willing to work with their customers to keep their business (and prevent notions of bankruptcy from flitting about).

Once you have opened lines of communication with representatives of the credit card companies, you should then ask about the potential for consolidation of the more troublesome cards (with the higher interest rates). Provided your FICO credit rating has not been demolished through the different accounts, many of the larger lending institutions will be only too happy to increase account limits take on their competitors’ debts – at surprisingly low interest levels, sometimes even starting at zero percent. Of course, after the worse accounts have been consolidated, those original cards will be empty, and it is the responsibility of the debtor to make sure they will never be used except in case of emergency. For borrowers with true spending addictions, it might even make sense to ask that the accounts be closed once and for all.