Tuesday, 16 June 2009

Credit Card Counseling Services

posted by debts.org at 03:09

Credit cards and consumers were a match made in heaven – that was until the rot of recession set in and things turned ugly. Now with redundancies looming, the same consumers are desperate to pay off their debts before an axe could fall.

Credit cards are an unsecured form of lending, which means they are a non-priority debt – unlike your mortgage for example. Fortunately for credit card companies this means you are probably paying off the minimum balance while trying to pay more on secure borrowing.

However, there are millions of people unable to pay even the minimum balance on their credit cards and are consistently defaulting, incurring a raft of charges in the process.

Take a look at the following advice on how to clear bad debt – in this case, unmanageable credit cards.

5 Ways to Pay Off Your Credit Card

Organize your cards
If you have more than one credit card, try to pay off the most expensive one first. Pay the minimum on the cheaper credit cards until you have repaid the one with the highest interest.

The higher the interest, the longer you will be in debt.

Negotiate
Try calling your credit card company to negotiate for a lower interest rate. Do your homework first and know how much your current rate is and how much you have been paying to date.

Persevere and ask to speak to the supervisor if you are being fobbed off. Sometimes the sqeaky wheel gets the grease.

Make up any shortfall
Defaulting on your credit card once will incur a charge and possibly terminate any special deal, such as a period of low interest. Defaulting on your credit card several months in advance, or not paying anything at all will probably result in your account being handed over to a debt collection agency.

To avoid this from happening – which is also extremely detrimental to your credit report – pledge to make up the shortfall as soon as possible. Make significant payments until the balance is up-to-date.

Stay within your limit
Exceeding your credit card limit is a sure fire way to incur charges but is also a dangerous sign. If you cannot stay within your limit, the chances of you mismanaging your borrowing and going deeper into debt are high.

Calling the card company as quickly as possible may help you save money. If you can convince them you are determined to pay off your debt, they may be willing to impose a one off flat fee for defaulting.

Balance transfers
Shopping around for cheaper credit card deals will undoubtedly help you reduce debt. A low interest credit card, even for a 6-month introductory period, will enable you to pay off large chunks of your debt. Make sure that when the introductory period ends, the interest rate isn’t higher than the card you are currently on.

For debt advice call 0800 520 0923, or visit our credit cards section for more information on how to clear debt.