The most basic form of credit is not your student, car or home loan, it is credit card credit. It can be difficult to live without a credit card. You use it to pay off your groceries, fee payments, home bill payment and maybe even large payments like purchasing a car.
The downside of credit card debt is the interest you’re charged. If you can’t make the monthly payments, then you are going to be in trouble. What you need to get yourself is credit card relief and you can approach your credit agency and ask for it.
Ask for Interest Relief
After the first two to six months that you find that you’re able to keep up to the full monthly payments, you should immediately approach your credit agency and ask for interest relief. Not being able to make the full monthly payment is the first sign that you are not able to manage the credit card.
You need several things to get interest relief – a good credit score and a good reason. If you have a good credit score, then you’re in luck because credit agencies are much more receptive to such credit cardholders. You have to give the credit agency a reason to lower the interest rate. Like high medical expenses, someone is sick in the family or an unexpected financial burden.
Consolidate Credit Card Debts
Chances are you have several credit cards and that’s what makes it difficult to manage the debt. Through debt consolidation, you can eliminate many credit cards and their debt. How can you do that? You do it by using the credit card that offers you the lowest interest rate. For example, assume credit card A offers the lowest interest rate. You can use credit card A to pay the debt for credit card B, C and D (all of which have high interest rate).
Now all of your debt is on one credit card account and much easier to manage.
Debt Repayment Plan
If you are completely swamped with credit card debt, you can negotiate a debt repayment plan with the credit agencies. This is another way to consolidate your debt and manage the credit agencies. For this method, you’ll have to take the help of a credit consultant. You will have to create a debt repayment plan that is acceptable to the credit agency. In turn, the credit agency will stop imposing penalties and sending debt collectors to you.
If you feel your life crashing down because of debt, and you don’t want to opt for bankruptcy, then the next best option is a Consumer Proposal. It gives you debt and credit relief and allows you to repay the credit agencies within 5 years.
These are the top options you have to deal with credit card debt. Which one you choose depends on how deep the debt-hole you’ve fallen into. If you need help in making the right choice, get in touch with 4 Pillar Debt Consultation.