Consumer Tips for Dealing with Debt

courtesy of LowCards.com

In the last few weeks, there have been many stories about a consumer debt crisis. This is a major issue in our country, and it is time for consumers to take action and do what they can to help themselves. It is easy to say that there is a debt problem without actually acknowledging that you have one yourself.

Here are nine signs that you have a debt problem:

You have to use credit cards in order to pay for necessities such as gas and groceries.
Your credit card interest rates are over 20%.
Your unpaid credit card balance is four or five figures.
You have paid only the minimum balance on your credit card for the last six months.
You are juggling debt payments on more than three credit cards.
Your credit utilization ratio is over 50% (your debt is over 50% of your total credit limit) on any or all of your credit cards.
You feel like you are living on the edge, struggling to make minimum payments for all of your debts.
You have used your credit card for a cash advance to help you survive from one month to the next.
You have not put any cash into savings during the past 12 months.

"If you are in debt, it is not something you can ignore or deny, and hope it goes away. Debt is not something that time will take care of. You must make a plan to deal with it now. The longer you ignore your debt, the worse your problem will be," says Bill Hardekopf, CEO of www.lowcards.com.

Here are several tips for getting out of credit card debt:

Be honest with yourself; don't deny that you have a problem. Pull out all of your bills and make a list of every outstanding debt and the amount due.
If you are behind on your bills and repayment seems overwhelming, contact your issuers, explain your situation, and ask to set up a payment plan. If you have late payment or over-the-limit fees, ask that they waive these.
Find a credit card with a rate that is less than 15%. If your current rate is much higher than this, and you have a good payment history, start by asking your issuer to lower your rate to 15%. If you carry a balance, you should only look for a card with a low rate and no annual fee. Don't worry about the rewards; get the card with the lowest interest rate.
If you can't pay off your balance each month, then keep your credit card in your wallet. Do not use your credit card for everyday expenses. If you can't afford to pay with cash, you certainly can't afford to pay an extra 15% interest on a pizza, groceries, or a tank of gasoline.
Ignore the monthly minimum when paying your credit card balance. You will never get out of debt by paying just 2% of your balance. Make it your goal to pay twice your monthly minimum each month, even if you have to reduce your cable or cellular packages, or reduce your entertainment and dining out to do this.
Pay attention to loans and credit that you apply for. Avoid subprime loans that charge exorbitant fees with little benefit for you. If you need an emergency loan, start with a personal loan from your bank or credit union. They tend to have lower rates and fees.
Get a part-time job for extra income to pay off your debt. This will be difficult, but the more you pay off, the faster you will be out of debt.
Make your payment before the due date. Each month look at your payment due date and set up an email reminder to help you make your payment in time. Do everything you can to avoid late fees that could set up penalties and default rates.
Calculate how long it will take to pay off your balance with the payment you make each month. You may be shocked at the length of time it will take to pay off your balance and large amount you will pay for interest payments. It helps to have a realistic understanding of your debt to the credit card issuer.

LowCards.com is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards/rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card, making it easy for consumers to compare more than 150 credit card offers and apply securely online. It provides advice about credit card and debt issues, news, and credit card updates.

Take the Next Step:

Do you have a debt problem? Check yourself against the above nine signs of a problem. It's best to attack the problem early, as it won't go away on its own.

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