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Credit Card Debt – How To Get Out Of It

It is possible to reduce credit card debt, even eliminate it, once you find the causes of your debt problems and use the right strategies to get out of and stay out of the debt.

The first step is to take stock of your current financial situation. Are you facing difficulty paying credit card bills? Are you starting to get notices from creditors?

Have you taken any action or are you blaming the credit cards and the credit card providers.

The real cause of your financial mess can be you or other things beyond your control. Rather than blaming your self or others you need to take responsibility of finding a remedy to your problem.

Causes of Credit Card Debt

Credit card debt is a major cause of bankruptcies each year. There are many reasons for credit card debt. One of these is over spending money in the expectation that your future income will cover the expenses. That income may not materialize due to any number of factors such as a job loss. The other reason could be to pay off a personal debt and not being able to earn sufficient income to pay off the credit card.

Some other reasons could include:

  • Medical emergencies: In the case of a medical emergency the excessive costs of surgery or other treatment may cause you to max out your card.
  • Income loss: Unemployment, business losses, or loss of spouses income may cause a huge gap between income and expenses, the easiest way to fill in the gap is with credit card debt.
  • Poor money management: Spending your money far in excess of your earnings is the primary cause of debt. You need to save money for emergency needs. Many people use credit cards without a spending budget.
  • Gambling: Gambling addictive and very difficult to control. If this addiction reaches a stage where your credit cards are used to fund your gambling, it will surely lead you to a financial disaster.

Ways to Reduce Credit Card Debt

Depending on your level of debt you can follow the following steps to reduce or eliminate your debts:

  • Drawing up a budget: To draw a budget, calculate your total income and your expenses. Your goal is to ensure that you can meet all the basic necessities: food, housing, clothes, health-related costs, among others.
  • Contacting your creditors: If you have trouble paying off your debts, address this immediately with your creditors. State to them the reason why it has become hard for you to pay these debts, and negotiate your debts to reduce your monthly payments.
  • Dealing with debt collection agencies: If you cannot stop your creditors turning over your debts to debt collectors be prepared to protect your rights. The Fair Debt Collection Practices Act clearly states that those collecting debts may not bug you, give false assertions, or do practices that are not fair when they are collecting money from you.
  • Hiring a credit counselor: Consider getting the help of credit counseling services that will help you in your debt problems. If you find good credit card debt management companies, creditors may approve your proposal and accept your modified payment plan.
  • Filing for bankruptcy: You should only use this as the last resort to fix your credit card debt. A bankruptcy stays on your financial information record for the next ten years. Getting additional credit, buying a house, sometimes even getting a job might be hard for you.
  • Use cash instead of a credit card: Hard earned cash is usually more difficult to get out of pocket as compared to just a credit card. By not adding more to your credit card debt or preventing yourself from charging your credit cards you simply reduce your credit card debt.

Finding money to pay off your credit card

Want to pay off your credit card debt even faster? Find sources of cash to increase your monthly payments. You can use various sources of funds to help you pay credit card debt as long as the cost of the money -- interest charges and other fees -- is less than the cost of your credit.

Find a weekend job or a "Work from home" job you can do in addition to your regular job, to earn some extra income. Save some cash by reviewing your monthly expenses and reducing expenses for less important things and activities. You can also cashing out your saving account or borrowing against your insurance policy.

Get into the habit of spending less

There are many ways to achieve credit cards debt reduction. But the key is to start spending less than you make. Even though eliminating your debt will take your will-power and a great deal of time if you keep yourself strong you will find yourself out of debt before you know it.