Credit card debt is one of the biggest financial concerns facing American families today. It seems to be a never ending cycle of debt that can be extremely difficult to overcome. Tempting introductory offers and high interest rates turn a seemingly good plan into a budget breaking nightmare. Short of bankruptcy, those who find themselves sinking in debt sometimes can't see their way out.
There is a way out of credit card debt and those who find themselves burdened by credit card payments can turn their situation around without the help of professional consolidation or bankruptcy. There are a number of ways you can reduce your monthly payments and there are smart ways to pay off your debt and keep future liability at a more manageable level.
It's no wonder why the cycle of credit card debt is incredibly hard to break. Those who can't afford to pay for a particular item and charge it to their credit card begin a cycle of debt that makes little sense. If a person absolutely can't afford to buy a particular item, how do they think they'll manage to pay the bill when it arrives – especially if that debt continues to build?
Wonderful bargains are no longer wonderful after a high rate of interest has been tacked on. If people only knew the total cost of individual items they've charged, they'd probably be astonished, and they certainly wouldn't be happy. The total amount some people end up charging is truly astronomical, and many have no idea how serious the problem is until it's too late.
If you're faced with credit card debt that's becoming more and more unmanageable, stop charging! Break the cycle of credit card debt and destroy or lock away problem credit cards. You might initially have more cash on hand when charging the items you want and need, but in the long run, you'll put yourself further and further into debt. Eventually, you might not be able to recover with your credit intact.
Watch Your Statements
Creditors won't typically lower credit card interest rates without a reason. If you've taken advantage of a low introductory offer, pay attention to your monthly credit card statements. After the introductory offer has expired, you're going to see your interest rates slowly and steadily climbing. If you don't pay attention to credit card statements, before you know it you could be paying double the interest rates that enticed you to accept the offer in the first place. Always read the fine print before accepting any offer.
Look at the details of your credit card statement each and every month, and take note of any changes. If you discover the interest rate has unexpectedly risen, call the credit card company and inquire as to the reason behind the increase. Politely threaten to transfer your balance to another card, and you might be offered a lower more manageable rate.
Consider a Personal Loan
If you took advantage of a low rate introductory credit card offer and made the unfortunate mistake of paying the bill late, look out. Your interest rate could be raised to incredibly high levels, and don't count on the credit card company understanding your plight. Credit card companies don't make a fortune on customers who pay their bills on time. Credit card companies are waiting and hoping you'll make a mistake so they can transform your fantastic low rate introductory offer to a higher rate of interest that you'll be forced to pay.
If you've made a mistake and your credit card interest rate was raised to an unmanageable level, don't sit back and let the credit card company revel in your loss. If your credit is good enough to take out a personal loan at a local bank or credit union, by all means, look into paying off the debt with a fixed-rate loan. If you ever again make a mistake, penalties for late bank payments are far less than the unfair and outrageous penalties you'll pay with a credit card company.
Formulate a Plan
When you look at your overall financial picture and it's hard to see past credit card debt, don't look at the entire picture. Break it down like a puzzle into pieces that are more manageable. Until you get back on your feet and begin to get ahead of the debt, pay at least the minimum on credit card bills with a higher balance and pay more toward those with lower balances. Before long, you'll eliminate the bills with the lower balances and you'll be able to apply more toward the larger bills. Eventually you will see the light at the end of the tunnel.