The effects of overpowering credit card bills can spill over into all parts of life, affecting your job, your family life and even your health. In fact, if you have large credit card debts, you may feel completely overwhelmed already and circumstances may appear hopeless.
Don't despair, there are many options available to help people free themselves of debt. If you're in over your head, read on for some tips to help you stop sinking and start swimming.
Get a grip
The out-of-control mall shopper is a caricature of the imprudent credit card user. But you don't have to be reckless to amass large credit card debts. Perhaps you tapped financial resources to advance your education, or your job was unexpectedly outsourced. Maybe a long-term illness touched you or your partner, or you started a business that never quite caught on.
When individuals use credit cards, they generally think it will be a short-term safe passage. Unfortunately, life has a way of taking twists and turns, which is often how credit card debt becomes a longer-term trap.
Credit card users, therefore, must remain alert and vigilant about their spending; even very small balances can quickly and unexpectedly balloon out of control.
In March of 2007, the US Senate looked into the practices of credit card companies, including the perceived lack of disclosure, universal default practices (in which a consumer can be severely penalized by one credit card account for being late on a separate account), and the interest charged on the entire credit card balance, even when customers have made timely payments.
In response to the Congressional inquiry, large credit card companies voluntarily changed some practices. Despite this, now more than ever, it's "borrower beware" when it comes to credit card use.
Get the lay of the land
If credit card balances and their corresponding payments have made your financial life unsustainable, you might consider taking some of these steps:
First steps:
Prepare yourself: Taking back the control over your financial life involves educating yourself about personal finance and taking a hard, honest look at the decisions you made to get yourself into your current situation.
Discipline, focus and personal stamina will be required for any debt relief effort. There are no quick and painless fixes.
Ask for help: Hire an independent financial advisor, such as a Certified Financial Planner, who can look at your particular situation, help you to develop a plan and select a specialist.
The kind of credit card debt management specialist that will be right for your situation will depend on many factors, including the amounts owed, the interest rates involved, the assets you possess and the particular creditors involved. Credit card use can be dangerous but the path to debt relief is also fraught with peril. As such, it's worthwhile to have an independent advisor at your side.
In addition to calling in professional help, you might also consider confiding in close friends or family members about your situation to assess all of your possible resources. Help can come in many forms, and who better to talk to then those that care for you?
If you can replace high interest debt with a personal loan, you may be able to get out of debt more quickly. You
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