What should you do if you are deep in credit card debt?

Answer

If credit card debt has become a problem, consider the following steps:

Stop adding to your existing debt.

Cut back on spending.

Make a plan to meet your bills. For help making a plan, you may want to call a credit counseling service.

If your situation is difficult but still manageable, you may want to personally call your creditors if you know you won't be able to make all payments by the due dates. Some creditors may be willing to arrange a debt repayment plan that you can manage. If you are working with a counseling service, talk with that agency first.

For more information about budgeting and dealing with credit card debt collectors, click here. For information about your option of last resort, bankruptcy, click here.

Answer

Be very careful using any kind of debt consoladation service or any kind of debt help. The best thing is to contact an attorney and see what your state laws are you may not be as bad off as you think. Most judges don't have a lot of sympathy for credit card co's. The person is right debt termination does not work they are all scams. I have chacked out over 20 of them on-line and find that they can't or will not provide any proof that their system works. Three of them said the same thing "you'll just have to trust me" ya right. Check your laws and also did both of you sign on the agrement, that could make a differance.

Answer

You have a few options. First, try very hard to come up with the funds to make at least your minimum payments. Look for ways to cut back: can you turn off your cable? take in a roommate? start a part-time job? go out to eat less often? stop giving money to your kids/boyfriend/parents/etc.? If you don't make your payments on time, it has the potential to cause your interest rate to rise on this credit card (and, potentially, on other credit cards if you have a universal default clause).

Second, (and you should do this regardless), you should call all of your credit card companies and see if you can get a reduction in the interest rate you pay. (If you go to www.oprah.com/jean you'll find a script for how to talk to them.) In essence, you'll tell them that you've been a good customer (if you have been), that you've paid your bills on time (they can look this up, so don't lie), and you're getting lots of credit card offers in the mail with better interest rates. It costs them more money to get a new customer than to keep you, so tell them you're thinking of taking your business elsewhere unless they help you out. This will work about half of the time, assuming that you have been paying your bills on time. (Note: even if they won't help you, don't close your account, as that can hurt your credit score; just stop using this account.)

Third, as a last resort, you should talk to a credit counseling service. They will do an intake--it should take about an hour (be worried if it takes substantially less time) to see if you are a good candidate; if you are, they will consolidate your debts into one payment, usually at a lower interest rate, and then you'll just have to worry about making one payment. The downside is that using this service will put a black mark on your credit history, lowering credit score and making it harder for you to get credit in the future.

Whatever you do: don't run and hide. Don't just stop paying your bills without talking to anyone at the credit card companies. You don't want to make a mistake that will hurt your ability to get credit for years to come.

First answer by anonymous. Last edit by Sheepgrape. Contributor trust: 208 [recommend contributor]. Question popularity: 209 [recommend question]

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