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Credit Card Crises or Credit Card Debt : How to get out?

Credit Card Crises :  Millions have sunk into various kinds of credit card crises !  Here’s how to get out of your credit card debt!

Here are some proven advice on how to get out of your credit card crises.  This is NOT a quick fix! Most people sank into it slowly.   So, don’t expect to come out of it quickly; it is a slow and steady process.  It is possible.  Many have attained the freedom from debt.  You can too.

Amy Fontinelle, a financial journalist and editor, provides six important tips to get out of credit card crises.

Pay More Than the Minimum Balance

It’s tempting to send in the minimum monthly payment (often $15 to $25) when you’re under financial duress.

It’s true, the temptation is just to pay the minimum due and forget about it for the rest of the month. That’s a big no!  Pay as much as you can every month until it comes down to zero.

Don’t Use Your Credit Card for Everyday Items.

Here, I agree with one exception.  If you are building your credit, go ahead but make sure you pay the full balance every month before the due date.

Be Wary of Credit Card “Rewards”

The rewards you can earn from credit cards, while a nice perk, are worth far less than the extra interest you\’ll accrue if you can\’t pay off the money you spend to earn such bonuses.

Yes, there is a kind of deception included in the “rewards.”

Say “No” to Cash Advances

Credit card companies employ tactics such as sending you checks in the mail as often as once a week and encouraging you to use them to pay bills or treat yourself to something nice, but only in the fine print do they mention that these checks are considered a cash advance.

The main reason why taking a cash advance is such a bad idea is that you start accruing interest the minute you take the advance – unlike with regular credit card purchases, there is often no grace period!

Yes, totally agree.  You pay heavily in interests on cash advances, starting immediately.

Avoid Using Your Credit Card as a Cure for Medical Bills

Medical bills can be overwhelmingly expensive, especially if you’re uninsured. If you’re having trouble paying your medical bills, negotiate an agreement with the hospital or other company to whom you owe money.

Normally, medical bills are not counted against your credit history.  So, you don’t make it count by using your credit card to pay for them!  Medical bills are a major cause of bankruptcy in America.  Negotiate with the hospital, clinic, your insurance company or the medical service provider on reducing the medical bill amounts.

Don’t Ignore Your Debt!

Some people become so stressed out or embarrassed by their credit card debt that they simply stop opening their bills and pretend that the problem isn’t there. While this tactic may appear to work for a month or two, it’s a bad approach because while you’re ignoring your bills, interest rates are causing the balance you owe to grow every day.

Ignoring your problem would only mean that you are living in a dream land!  Don’t be deceived or discouraged.  Face it and clean it!

Please read Amy’s full article on Investopedia.

Americans have created billions of dollars worth of debt over the past 45 years, and credit card debt has been an important part of that. Credit card debt dove — along with consumer spending — during the 2008 financial crisis and slow growth has kept total revolving debt at pre-crisis levels, though it is creeping up. According to figures from the Federal Reserve, total U.S. outstanding consumer debt was $3.34 trillion as of February 2015.1 That figure includes car loans, student loans and revolving debt, but not mortgages. Total U.S. outstanding revolving debt, which is chiefly made up of credit card balances, was $884.8 billion as of January 2015.1

Cut down your unnecessary expenses.

Personally, the main key ingredient in getting out of your credit card crises is cutting down on your unwanted expenses.  Especially those fashionable, ‘want to have it now’ gadgets and things!  It is really the uncontrolled love of things that really gets many people into the credit card crises of many kinds.

Many countries are in many kinds of credit card crises by way of providing benefits to lazy citizens for long periods of time who do not contribute in any way or form to the growth of the economy of the country they are living in!

Start clearing the small debts or credit cards.

Begin by clearing small amounts of debts or credit cards with the least amounts of debt.  Bring them to zero and leave them there.  Do not cancel them at this time.

Most importantly, do not apply for another credit card to clear yet another credit card!  That’s a snow ball which only gets bigger and dangerous as time passes!  This does not help in getting out of your credit card crises but complicates it further.

If possible, get help from family and/or friends.

Please ask your family and/or friends to help you get out of your credit card crises.  Really concerned family members or friends are more than willing to help you get out of your credit card crises.

If they provide a willing ear, explain to them clearly the predicament you are in.  Do not boast about your credit limits.  Do not make great promises.  Accept you are in trouble and in need of help.

What to do once I am out of my credit card crises ?

Once you are out of your credit card crises, keep your credit card debt to 5% of of the allowed limit.  Yes, only 5% of the allowed limit in each credit card that you own!

Use cash, not cards!

Every time we use cash for purchases, pain is registered in the brain!  That simply means, we think twice before we make a purchase which very important in keeping out of future credit card crises!

Finally, a word about planning or budgeting.

Plan your purchases ahead of time.  We all yield to temptations easily: so we need to guard against it.  Before going shopping, set the limit of you purchase amount for that trip and every trip thereafter.  This will greatly help in keeping you out of future credit card crises!

Wish you all the best in your journey of getting out of your credit card crises!

For those interested in further studies on credit card crises in America, here is a list of articles that I cited for this post.

  1.  Credit Card debt statistics
  2. Ten states with the most credit card debt!
  3. Four out of ten Americans are one bill from disaster!