Most of us have dealt with credit card problems —those lifeless credit cards in your wallet pose deadly threat to your financial vitality. It is easy to spend what we haven’t earned without realizing that every unearned money we spend with credit card takes away our ability to grow wealth dollar at a time.
What if you are already at this deadly crossroad facing overwhelming stress caused by these credit card problems? It happens. But, the good news is that there are insanely simple ways to overcome these credit card problems in your life no matter how low self-esteem you feel about your current financial situation.
Take Total Control.
The very first step you can take is to take control of your credit card debt problems than allowing these problems to control your life. You always want to live responsibly but it is also important to know that the world won’t end if you can’t pay your credit card debt now. This simple revelation will lead you to start planning a course of action — to stop creating more credit card problems and to rebuild credit history going forward. We all have heard cliche’ — “stop the bleeding”; the same applies to your financial problems — “stop using any credit card now“.
Pay Your Most Expensive Credit Card Debt First.
Make list of all your credit cards with interest rates and outstanding balances. It’s easier to use Quicken but you can even use a simple spreadsheet. Once you have this information, pay largest amount monthly towards the card with the highest interest rate; pay minimum required for the rest of the cards. Once you pay off highest interest rate card, cut the card in half and repeat the same process for the rest of the cards until you pay off all the credit cards. If you have money sitting in savings account, it’s time now to use that to pay off your credit card debt. It’s amazing that how easy it is to forget the money we lend to the bank at an insanely low-interest rate and pay the same bank outrageous interest rate for the privilege to use their credit card.
Negotiate Better Interest Rate.
It’s human nature to avoid taking action against any problem that show its ugly head including credit card problems. We pay attention to scorecard of our favorite football team and we all get excited to discuss our political beliefs; yet, we seldom pay attention to our credit card statements monthly. Most credit card companies can change interest rate for several reasons. Call each credit card company and demand that you deserve lower interest rate for being a loyal, long time customer. Even if they reject your offer, keep calling as you’ll save a great deal of money if they lower interest rate by even few percentages.
Take Charge of Your Credit Card Problems.
If you find yourself in the dark hole of financial despair, remember that you are not the only one facing this debt daemon. Even if you are already late several months, call the credit card company and try your best to work our a settlement. But, you have to take proactive stance to work out a settlement within 180 days from the day you missed your first payment. When credit card company lent you money, both parties recognized the risk involved. So, credit card company wants to work out settlement rather than selling your unpaid debt to a collection agency for few cents on a dollar. If you wish to pay off your debt, most credit card companies will allow you to settle for twenty-five to thirty cents on a dollar. Imagine if you can pay off your credit card debt and live debt free. You can save your future earnings and grow your nest egg much faster once you bury your credit card problems.
Learn to Spend Wisely.
I firmly believe that frugal habits lay foundation for our financial well-being. These habits make us cognizant about our wants and needs. It’s insane but as a fun exercise, write down all your purchases you’ve made in last few months and, honestly, categorize them by words ‘want’ and ‘need’. You’ll be surprised that we spend most of our hard-earned money on our wants. Avoid any unscrupulous spending on those things that create clutter and pose threat to your financial health.