Paying off credit card debt is as simple as submitting a payment. The payment is sent, the check is cashed, and the debt is gone. It’s the simple act of submitting the payment that makes this process so difficult. Consumers have a hard enough time paying current bills; so to add an old debt to the equation would be asking too much for some households.
A Hard Lesson Learned
A car accident left me in the hospital for a week. I had enough money stashed away to keep me for the next three months, but didn’t know what I would do after that. I was a full-time student, unemployed, but always faithful in paying my bills on time. So, I called each of my creditors and explained my situation. All I asked for was some leniency while I sought employment (i.e. lower interest rates, programs, financial hardship assistance). One company dropped my interest to 0% and set up monthly payments of $10 for the next six months. The other companies had no program for me since I did not owe at least $5000. My total credit card debt at the time was below $3000. All six of my accounts were on schedule to be paid off by the end of the year, right on time for graduation.
I had to learn the hard way that debt is a profitable business and the longer I stay there, someone was benefitting. At the end of the year I enrolled in a debt management program to help me get back on track financially. Five months in a realized this program was not for me. I just wanted to get out of debt and move on with my life. My perfect credit had taken a nose dive, plans to purchase a home were sunk, and creditors continued to call and write.
Taking Control of Your Financial Future
Debt is debt, no matter how high or low the amount. Debt will always be a hindrance, but is sometimes unavoidable. Credit card debt and low credit scores can lead to higher interest rates and credit denial for large purchases. If you find yourself in a situation where you are unable to pay a debt on time, remember to:
- Stay in contact with your creditor – It is a good gesture to let your creditor know what is going on. They may be able to help by notifying you of special programs that become available. Most companies keep a log of each time you call and keep notes in your profile questions you have asked. This will come in handy if you need to prove that they were made aware of a particular incidence.
- Take notes – Keep accurate and thorough records for yourself of each time you contacted the creditor, either by phone or mail. Write down the date, time, name of each person you spoke with, and a summary of what you said to each person. You will eventually have to refer back to these notes.
- Organize your paperwork – Make a file folder for each credit card. Place every statement you have in the designated folders. You will need to keep track of every charge that is added to your bill (i.e. late fee). Keep any correspondence and/or notes. Anything dealing with that creditor needs to be filed.
- Start saving – Now you need to save some money to send to the creditors. Clean out an old soda bottle or large container and save every cent you come in contact with. You will be amazed at how much money you can save this way. However, you will need to put aside some cash. Make a budget and stick to it.
This is only the beginning. Once you have started these, you will be prepared to move to the next step in paying down credit card debt.