There are option with your unsecured credit card which you may not be aware of. There has been some changes in the law recently. This and the recession have improved your ability to negotiate your payments with a credit card company if you are having some difficulties with your payments. It is easy to get into a high credit card debt and have the feeling that you cannot get out off debt.
It is important to understand the credit card that you have. If your credit card is secured and attached to your home, this is definitely important to make your payments or to make an agreement with your financial institute.
If it is unsecured, and you are having some financial difficulties, it may not be a top priority – but should be paid as soon as you can.
If you have made the decision to keep your credit card you should contact your financial institute and make a deal with them. Studies show that the credit companies are lowering their interest rates. Some credit card companies are even lowering the monthly payments, reducing fees and assisting customers who are having difficulties with their payment by assisting with debt management. If you are interested, contact your company and see if they can help.
Decide if you want to pay the debt out or cancel the card completely.
When you discuss with your provider, you may be able to settle you’re card for a third or half of what you owe on the card. Your financial company will not offer this deal unless you are a number of months late. With the new laws, they usually are in contact with you much earlier than letting it get very overdue. In most circumstances the financial company would prefer that you pay your account in one payment or over a few payments but if you are under some financial strain it may be very hard to pay a large amount in one payment.
If you are not able to pay your credit card and have made the decision that having this high credit card debt is not something that you are willing to keep one option is to cease paying it. If you make this decision, the consequences will be negative. This can affect your future borrowing privileges. The financial institute may take you to court, which can take a lot of time and this will also affect your credit score. As this affects your credit score, this can affect borrowing at a later date as you will be, as they may call you, a risk. Being this sort of risk means that you will have a lot of trouble borrowing money at a later date, which is less risky than if you were to lose your home because of a bad choice. Having a high credit card debt is something that can affect your future lending, so choices have to be made before you get into this debt.
There is now a new Credit Card Act which was passed in Congress in 2009. This new law stops a lot of the problems that consumers had complained about in the past. The new credit card act applies to consumer credit cards, not the business credit cards and any credit cards that are secured by your home.
If you contact your financial company, you should be aware of the things that you can do and the things that you cannot. An example is that the financial institute is not able to raise the interest rate on your balance, as a penalty for not paying your minimum payment by the due date. The new act can also place limits on the card company so that the interest rates during the first year won’t be raised. If you want to close your account, the financial institute can’t make you pay the full balance you owe in one payment. This is under circumstances that you must discuss with your company.
You are required to make only the minimum payment each month and if you do this, it will take a very long time to pay this debt out. The longer time you decide to pay your minimum payments, the more money you end up paying in interest.
The new Act requires the financial institutes to have printed on the statement how long it will take to pay off your high credit card debt if you pay the minimum payment. The statement should also show your payments per month to have your debt paid in 3 months.
If you decide to pay your debt off with the minimum payment, this is something that can work if you have more than one card to pay off. If you decide to make the minimum payment on all your cards and pay more on just one of the cards, this can get the balance paid off on one card then start the same process with the next one.
If you decide that you are wanting to have a temporary reduction on your payments have a chat with your financial institute. If you’re having problems making your payments and you have not been able to come to a compromise with the company you may be able to set up a temporary reduction on all your cards. With the new act, the money that you pay extra will automatically go on the card with the highest interest rate.
If you are struggling with high credit card debt, get help. If your company will not lower your interest or assist you, you can get help through nonprofit debt agencies or counseling services.
Also, listed on your statement, there should be a toll-free telephone number for a credit agency in your area. Make sure that you research the agencies first, to be sure you’re getting the best help and not a company that is not legitimate.