Do You Need professional Credit Help?
It can be said that everyone starts out with the best of intentions with their credit cards. No one wants to end up in terrible credit card debt. Most people, when they first get their credit card, loves the feeling of having that spending power in your wallet, even if you don’t use it. The vast majority of people that find themselves in serious credit card debt are those that spent a little here, a little there and before they knew it, they were in over their heads. Here are a few tips you can use to see if you should seek professional credit counseling help for your credit card debt.
Compare the money you have coming in and the money you have going out – If you don’t already have a working budget that clearly illustrates your cash flow, make one. It isn’t hard, simply write down how much you make per month and add in any other sources of income and then jot down your bills and your expenses. If the money you have coming in is shrinking due to a recent job change or if you just decided to go back to school, but your spending habits on your credit cards aren’t adjusting to match your new financial reality, you might need professional financial help.
If you have accepted the fact that you are only able to pay the minimums on your cards and you aren’t formulating a plan to try to fix that situation, then that is a sure sign that you are in serious financial trouble. Paying a minimum should only be an emergency fix to your credit situation, not a long term plan. If you have to pay the minimums once in a while, no one is going to criticize you, but if you can only afford the minimum month after month, you need to speak to a professional because you are going to end up paying thousands in interest, and that is never a solution.
If you are continually applying for new cards to take advantage of the low intro rates instead of actually paying down your cards, you should speak to a professional credit counselor. This is called revolving credit and not only does it not help you pay down your balances, it also destroys your credit rating. It is human nature to always want the lowest rate on the best card with the best terms, but intro rates are just that, intro. They fade away after a few months and a smart credit user will wait until a card with an excellent post-intro rate comes along before they transfer their balances. Don’t fall for the intro rate trap, they can do more harm than good.
If you can’t seem to throw away credit card offers and you start accumulating cards like a crazy cat lady has cats, then you have a serious problem. You are killing your credit rating by ending up with 6 or 7 cards because the credit bureaus will be able to see that you don’t have the income to match the amount of credit you have. In addition, when you have all those cards, it is extremely tempting to use them and that can only lead to even more financial difficulties. Stick to no more than 2-3 cards at the most, and choose wisely.
Not only is having too many cards a problem, if you are flirting with your credit limit on the cards you do have, you are in serious financial trouble. Your credit score will suffer if you continue to live like this since you are using such a high percentage of your total available credit. This is one of the major indicators that credit card companies use to judge who has good credit and who doesn’t. Even if you don’t miss a payment, you are ruining your credit score by using such a high percentage of your overall available credit.
If you are using your cards every month even though you are having trouble making more than the minimum payments, you have a credit problem. As a rule, you should never (or at least as infrequently as possible) spend more on a credit card then you pay. It may sound a bit unrealistic, but it is the best way to make sure you don’t end up in credit card debt to begin with. Your card should be used as a temporary way to pay for things instead of cash. If you can’t pay off your entire balance every month, you should try to pay the highest percentage of your balance as you can. Otherwise, debt will mount and so will your credit woes.
Many people take on extra hours at work or even a new job to pay off credit card debt or to pay off a new car as fast as possible, but if you are putting in 60 hour weeks or more and all you are doing is treading water, you need to seek help right away. No one can keep up a schedule like that forever and if you aren’t making significant progress with your extra hours, you need someone to save you.
If you are one of those people who lets their credit card bills sit in the mailbox or on the kitchen table for a few days after they arrive at your home because you simply don’t want to know how much you owe, it is pretty apparent that you have a problem. You should have a pretty accurate idea of your total credit card debt at all times. If nothing else, it helps to remind you that you probably shouldn’t be using your cards. This also comes back to making a budget to live by. By knowing your financial obligations, it helps you set goals in paying them off.
If the calls from the collection agencies and the letters about delinquent accounts have started to come flooding in, this is just about the biggest red flag out there that you need professional financial help. What you have to realize is that no one is going to judge you or think you are a terrible person because you let your credit get the best of you. It happens to thousands of people every month, and for most folks, it was due to circumstances beyond their control. You need to zero in on what you can do about the problem now, and the first and best step is asking for help and seeking the advice of a professional credit counselor. It can be the best financial move you ever make.