Using a credit cards and piling up a huge debt is very easily done. It is basically down to the fact that we are not actually “feeling” the weight of the money, when using the cards we only associate it with putting the pin number in, but not getting into bad credit.
The dangers of bad credit card debt are that your credit score is going to get reduced in no time, and it will be much harder day by day to obtain any ind of finance, not to mention the average time it takes to pay off credit card debt.
As credit cards have a much higher interest rate than unsecured loans, you can actually end up paying more interest than the capital, making it almost impossible to clear your debt in a reasonable time. Credit cards set you a trap giving you the freedom to spend huge amounts of money and get into serious debt problems without even realizing it. By giving you the option to pay the minimum amount monthly, it is speeding up the process of piling up huge interest debt as well.
If you already have a credit card debt that you cannot handle, please read the following tips to make sure you will be prepared for the battle with the beast of “Bad Credit Card debt”:
Your first task is to collect all the copies of credit reports from credit reference agencies. You need to make sure that all the details are accurate, there are no records that shouldn’t be there, of credit you already cleared off. You might have to wait till the agencies make their queries and update their report, but it is worth it as it makes it easier for you to prove your creditworthiness and better your credit score.
After you have the copy of your credit report, you have to evaluate your financial situation, not leaving anything out. You have to make a list of your sources of income and your outgoings as well. Then your task is to decide whether or not you can meet the increased minimum payments on your credit card, or with careful budgeting you can actually make a higher payment each month. Should you find yourself in the situation that your credit card debt is so serious that you cannot even meet the minimum payments, you need to contact your lender to negotiate a deal. Remember: burying your head in the sand will not make things better, only worse.
When dealing with your credit card company, you have to use your negotiation skills or seek advice from a professional credit repair agency, to find a solution suitable for you and the lender likewise. Lenders will appreciate you for your willingness to pay the amount back and will try and make the process easier.
If you are unable to come to an agreement with your credit card company with regards to eliminating your bad credit, you can look for alternative solutions, such as consolidation credit cards with balance transfer. If your credit score allows, you can also be accepted for a consolidation personal loan, which is a handy solution, if you would like to know the exact amount you have to put in in order to clear off your bad debt. If you are not sure that you can pay back the credit balance on the card before the initial zero percent period ends, I suggest you take on a bad credit consolidation loan.