I would imagine that many of us have either dealt with credit card debt, or at least know someone who has. The fact that the average household has more than $15,000 of credit card debt (of those that have credit card debt) tells me that many are intimately acquainted with such debt.
If you have dealt with it, then you can relate to how unbearable the feeling might be, but the good thing to remember is that it is possible to slay the beast of credit card debt. While I am disciplined with my credit cards now, and use them to leverage free money for vacations I was not always that way. I discovered the lure of the credit card in college and graduated with almost $25,000 in consumer debt. The tips I’ll share are not so much action-oriented, rather, they’re ways to wrap your mind around the debt so you can start to work on paying it off.
Face the Reality of Your Credit Card Debt
A common temptation when dealing with credit card debt is to ignore the problem. As someone who tried this route, I’ll let you in on a little secret…that does not make the debt go away. In the months leading up to realizing the problem I had, I did what I could to avoid dealing with reality. That only set me back several more months and once I got the first notice of a card being deactivated it was like a cold cup of water being thrown on you while asleep. By waking up to the problem you can start paying off debt quicker and deal with the fallout of your spending decisions.
Looking back, my credit card problems were due to a spending addiction. I was simply not content with life and used credit cards to fund the lifestyle that I wanted, but really couldn’t afford. Whether you have this same addiction or not, the debt is likely (generally speaking) due to some sort of living beyond your means. I had no real choice but to stop spending cold turkey and live with that challenge.
Stopping immediately might seem impossible, but it is very possible – it just requires a shift in thinking. Speaking personally, this meant viewing each purchasing decision as asking myself whether or not I needed the item in question to survive. If I did not, then the decision was an easy one to make. Ultimately, you’ll not be able to overcome credit card debt if you’re not willing to take a hard look at your spending habits and deal with them appropriately.
Look at Who You’re Borrowing From
I had a very ignorant view of how credit cards work when I was in college and thought they were basically free money. Oh, how I wish I could go back and smack my younger self silly! They’re by no means free money, but something that when used inappropriately, can be very destructive. Understand that credit card companies love unpaid balances because it means they’re making interest off of you. If you have a high credit card balance then they’re likely making a nice sum off of you each month.
As an aside, once you get those credit cards paid off, you’ll likely notice that you’ll soon start getting regular credit card offers in the mail weekly. ‘Why,’ you ask? It’s because they know you might have a problem and they want to make more money off you. This is not meant to demonize credit card companies, but to make clear that they’re out for themselves and no one else. Keep that in mind when you’re swiping your card next time – they’re extending you a line of credit which MUST be paid back.
Have you ever had credit card debt? What did you do to get it paid off?
Image by SqueakMarmot/Flickr
7 thoughts on “What to Do if You Find Yourself in Credit Card Debt”
I did have credit card debt, ($35,000.00) after my divorce, medical bills, moving across the country, unemployment, but really just plain spending. I was able to control and pay the minimum until the minimum was doubled from $424 to $848 a month because of identity theft. The thief got my social security # and kept trying to open new accounts in my name. I was told that I was trying to take out too much credit, when in fact I hadn’t.. That’s when I realized what happened. Anyway, there was no way I could pay this off and I called and talked to the bank. I explained my situation, and the next day I received a call back stating they were giving me 5 years to pay off the balance (balance liquidation program) at 0% percent interest and $424.00 a month. I did it, and it is gone, and I do not carry a credit card balance anymore. My suggestion would be to anyone that can’t pay, call and speak (nicely) to your creditor and tell them you want to pay, but cannot at that rate. I actually did tell my bank that I wanted to pay it because they were there for me when I needed the credit, and I thanked them.
Wow, so sorry to hear that, but so glad that it worked out for you and that the bank was gracious in extending 0% interest to you. It’s often the interest that’s the killer. Great point on being nice, that can often go a long way for you.
Best tip for paying off debt fast is to just stop spending. Each and every time you have a moment that you feel that you need something ask yourself if it’s a need or a want. Then find ways to make extra money and throw all that income towards paying down debt.
I could not agree more Sean. So often it does go back to a spending problem that simply needs to be corrected.
I ignored my debt problem for quite a while just to avoid emotional pain of knowing/seeing I was going nowhere with my life. Facing reality and stopping spending (and starting to earn real income instead of remaining in a frustrating job situation) were precisely what I did… the evaluation of the credit card industry (and financial industry as a whole) came a little later, but I agree with this post completely.
I was guilty of the same thing as well. Looking back, I have no idea why I thought that would work by any means. That said, you’re spot on about making that shift to earning real income and stopping that spending – the combination can be a powerful one.
credit card debt is so difficult to get out of 🙁
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