1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair
2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% -
3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.
How can I get rid of
credit card debt?
The first and hardest thing you need to do is get rid of your
credit cards. In our society this may seem to be an impossible
requirement. It’s not. People have lots of excuses for not doing
it. These include the assertion that no one wants to accept
checks anymore, or that they need to be able to get gas at night
when only the automatic pumps are open, or that they have to
have a credit card to take advantage of online shopping
opportunities. These sound plausible, but there are perfectly
workable answers and alternatives for all of these “problems.”
The first and most obvious solution is to get a debit card. As
long as you have a bank account or
credit union share account you can get a debit card. Modern debit cards
will work in any machine that accepts credit cards, and they are
accepted for online shopping as well. Naturally, if you are
using a debit card you cannot spend more money than you have,
but that’s why they are a wonderful tool when you’re trying to
get rid of credit card debt. If you were currently handling your
credit cards wisely you wouldn’t need to be on a program to get
rid of the debt. It’s not going to happen if you’re still
charging things. It’s as simple as that.
Video: How to Get Out from Under Credit Card Debt
A debit card is not the only answer, of course. Most stores do
still accept checks, as well as cash. For online shopping you
should consider the PayPal service. There is no charge to set up
an account. PayPal makes their money from the recipients of
funds. If you have a bank account you can set up an account, and
use PayPal to pay for most, if not all, online products and
What is debt settlement?
Even after you have cut up and canceled your credit cards ( do
both so you’re not tempted to send for a replacement card) you
still have to deal with the credit card debt you’ve already
incurred. If you’re not in a position to pay all of it off,
consider trying to arrange for debt settlement. The term may
sound technical, but it just refers to making a bargain with
your creditors to pay a portion of your debt in exchange for a
full release. Why would they do this? They are concerned that if
you are too far in debt you may consider filing bankruptcy. If
most of your debt is unsecured (i.e., credit card debt) any
liquidation bankruptcy will probably be a “no-asset” bankruptcy.
This means you have no non-exempt assets that they can reach. If
you do that, they get nothing. With a debt settlement you
negotiate (either personally or through an agent) a amount you
can pay promptly. The creditor gets something quickly, rather
than risk getting nothing after paying a lot of fees trying to
collect from you, and you get a release from your debt.
Video: Are You a Good Candidate for Debt
Why should I settle rather than filing bankruptcy?
If you settle your debts rather than filing bankruptcy your
credit recovers a lot faster, and the settlement itself is not
an adverse credit entry (any late payments, etc. leading up to
it are). Not only does your overall credit recover faster, but a
bankruptcy can completely prevent some transactions for a
period of time. For instance, you normally cannot get any kind
home mortgage for two years after your discharge
in bankruptcy. There are many ways to get out of debt. Contact a
professional for professional advice on the matter.