Folks are asking if there is any government program to help them ameliorate credit card debt; especially when that debt is $10,000 or more. Sorry. Uncle Sam was very willing, in the interest of the economy, to bail out Wall Street investment bankers, national banks, and other financial institutions. No relief program was assembled for middle class workers with interest rates spiraling out of control.
What Are Credit Card Companies Doing?
Bailed out from their financial crises, credit card companies are are ensuring they never have to endure that turmoil again – on the backs of credit card users. The big three credit card companies – MBNA, CitiBank, Bank of America – announced that they would double minimum payments from 2% to 4%. Other credit card companies will soon follow. If you are already in over your head in credit card debt, that debt will be taking a bigger bite out of your monthly budget.
What Are the Facts About Credit Card Debt?
If you are already in credit card debt; how are going to double your monthly payments? If you can, do it. You will be getting rid of your debt more quickly. Quit putting purchases on your credit card accounts. If you are only paying minimum payments, you are digging yourself deeper and deeper into a credit card interest rate hole.
Want To See How $2,000 in Credit Card Debt Becomes $7,000?
To understand how you can be stuck, consider this. Let us say you have charged around $2,000 on one of your credit card accounts. (Just one!) You are being charged with a percentage rate of 18% for using the credit card money. Credit card debt is really just an expensive loan, after all. Then let us say that you never use that card again. If you make only minimum payments, it will take you 30 years to repay the debt. Many marriages do not last as long. Plus, you will be paying over $5,000 in interest rates over that 30 years. A good hunk of your life will be spent paying that debt; and your $2,000 loan will cost you $7,000.
How Do You Get Yourself Out of This Hole?
Even if you trim your monthly budget to the bone, $10,000 or more in credit card debt is going to force you into considering bankruptcy and all its attendant horrors. You need to act fast before you end up on the street and penniless. Most credit card companies, recognizing that most of your debt comes from interest, may be willing to come to settlement terms.
Are Credit Repair Companies Helpful?
You could hire a credit restoration company to negotiate settlements – be careful. Many shady companies of this sort have one goal – your money. Negotiations are promised, but never occur. More and more of these companies are being shut down. A sad fact is that money that should have been put toward the debt has disappeared. And your credit card company still needs to be paid. Investigate any such company thoroughly.
Can I Get My Debt Reduced by Myself?
If you are smart, you can approach the credit card companies yourself. Get guidance for undertaking this endeavor by looking for guides at your local bookstore, or doing research on the Web. Getting your obligations reduced to 50% of your total debt is not unreasonable. Plus, you can trim the time to payoff from ten years to as low as three. Get busy – time is wasting and your purse is leaking badly.