Credit Card Debt Reduction
If you want the credit card companies off your back, credit card debt reduction is the name of the game. There are a number of ways to reduce your credit card debt; however which method you should use relies on your specific situation. Here are some situations regarding credit card debt and which credit card debt reduction solutions are ideal in each case.
Situation 1: You're Making Payments On-time but Your Debt Won't Go Down
Explanation: Basically in this case, you have credit card debt, you're making payments, but it's not going down. This is a sign that you're using your credit card(s) too much OR you're only paying the required monthly minimum payment.
Solution: You need to either a) pay more than the monthly minimum, or b) stop using your credit cards. In this case, the creditors probably are not calling, so you can handle this type of credit card debt reduction on your own. Check out ways to eliminate credit card debt on your own.
Situation 2: Debt is Rapidly Increasing and You're Missing Payments
Explanation: In this situation, you're debt is starting to spin out of control and you're losing control of it fast!
Solution: You need to Stop, Look, Plan, and Act. This means you need to STOP using your credit card(s), LOOK at your expenses to see why your debt is increasing so rapidly, PLAN a way to change all this, and ACT on the plan ASAP. The best PLAN for this type of situation is to drastically cut your spending. There's obviously something that's causing your credit card debt to spin out of control. Maybe it's too many luxury purchases. Maybe you're a DVD nut and purchase new DVDs every week. In any case, you need to identify what you're spending too much on. If all your spending is on necessities, then you're not making enough to cover your debt. In this case, it's best to get credit counseling help.
Situation 3: The Creditors are Calling
Explanation: You've defaulted on numerous monthly payments and the credit card company has sent your account into collections (AKA you're in serious trouble).
Solution: You need to sell what you can to pay off your debt or get professional help. This means if you have an extra car, boat, or even property that you can afford to sell, sell it. When the creditors start calling, your credit is in jeopardy and you need to do everything you can to get your finances back in order. If you have nothing to sell, it's time to negotiate with your creditors, consolidate your debt (if you have multiple credit cards) or get credit counseling. Negotiating with your creditors is possible but if you don't know how to negotiate, it's best to consult a credit counseling service. They'll let you know if debt consolidation is your best bet or if they need to intervene and negotiate a payment plan for you with the creditors. In any case, it's a good idea to consult the Bills.com Debt Relief Boot Camp for details on specific types of debt and an explanation of available debt relief and credit counseling solutions.