Credit Repair: Pull Out of Your Downward Spiral
You know the danger. You know your weakness. But those pre-approved credit card offers keep looking at you seductively from your mailbox.
Part of the allure of credit cards is the belief that you need one, "just in case." As a result of such thinking, these offers are not discarded as they should be. Instead, you keep one or two to look at for those "just in case" situations.
They tempt you with excellent terms - no annual fee, a great APR for the first year, zero percent balance transfers, high limits. You can even design your own card or personalize it. Imagine carrying around a camo credit card? Or one adorned with stars or puppies? Just for emergencies, though.
You may apply with the intention of using it strictly for emergencies. Isn't that a safe and responsible thing to do, you say to yourself.
After a few weeks of telling yourself that you have mended your spending ways, you finally get your new card. A host of financial burdens seem to melt away. You no longer have to worry about your car breaking down or where to get gas money - you can always borrow the money and pay it back later.
Maybe you forgot about the personalization, the colors, and the dolphins, until one day it arrives: your credit card, your instant money.
When it arrives, you check out the terms and activate it. You then put it into your wallet - for emergencies only.
Now that you have the credit card in hand, ready to go, your mind drifts to what you can buy with it. You'll definitely pay the balance in full each month, so a few little purchases won't hurt. And isn't it better to use it and pay it off than to let it gather dust in your wallet? A few small, inexpensive items, and then only for emergencies.
The first payment slip comes in from the bank. It is asking for a number dangerously close to the number on your pay check.
And so you enter the cycle of debt in earnest. Instead of paying off the entire balance, which you told yourself you would do each month, you pay a minimum payment. Instead of cutting your spending, you continue to use the card and pay only this small amount.
You are driving yourself deeper into debt. Soon, your credit card will have reached its maximum balance. This can leave you in a financially vulnerable position, so you get yet another credit card. Without changing your spending habits, however, you are just perpetuating the problem. Soon, you have to maxed out cards and are making only minimum payments on each.
Maybe one more card? That way you can pay off the other two and make payments on one. But that spirals out of control, and you are making minimum payments on not one, not two, but three cards. And, to make it worse, your great introductory rate has expired. It has shot up to twenty percent. Don't even think about getting a late charge. Your "few small purchases" have turned into thousands of dollars in debt, and it's growing each day.
You fool yourself to prevent the reality of your increasing debt and lowering credit score.
You make plans to pay off the entire balance with tax refunds or bonuses. But these get sucked up in everyday purchases, and still your debt grows.
The car payment is due, the mortgage is due, and you need a new water heater. The cards remain unpaid and your mailbox is as full as your missed and avoided call list. You have lost control.
Start boldly and decisively to take back control. Take your three credit cards and cut them up. Be merciless. If you work hard to pay them down, you don't want the temptation to start using them again. Once you've paid them off, you want them out of your life.
If you do decide to keep one card, make a concerted effort to pay it off in full. This may mean making some sacrifices, but it is well worth it to dig yourself out of debt. Use if for emergencies, but make sure you have a clear definition of emergency. A great sale on shoes is not an emergency. Fixing your car so you can get to work is.
Your next step - and you're not going to like it - is to talk to your creditors. Their goal is to recoup their money: if you cannot pay the entire amount, they would rather get something than nothing. Most will be willing to work out a repayment plan that you can afford.
Be honest about how much you can afford to pay. They will work with you once, but if you get in over your head again, they may just pass you on to a collection agency.
You were living in a world of money that you fictitiously owned. The reality is that money was real, and you really do owe it back to someone.
When overcoming debt, it takes time and effort. You can't pay off thousands of dollars of accumulated debt in a week. It will take time. This time, meanwhile, can be put to good use. You can rethink your spending habits and create a workable budget.
You may be overwhelmed by the amount of time it will take to become debt free. The truth is that you cannot afford not to become debt free. Continuing with your current habits will only make matters worse. It may be easy to rack up the debt; paying it off takes more control, effort, and persistence.
Credit repair is real. It just takes a strong sense of reality, responsibility and understanding of how the problem came to be. Learn how to fix your life by restoring your credit rating. - 16931
Part of the allure of credit cards is the belief that you need one, "just in case." As a result of such thinking, these offers are not discarded as they should be. Instead, you keep one or two to look at for those "just in case" situations.
They tempt you with excellent terms - no annual fee, a great APR for the first year, zero percent balance transfers, high limits. You can even design your own card or personalize it. Imagine carrying around a camo credit card? Or one adorned with stars or puppies? Just for emergencies, though.
You may apply with the intention of using it strictly for emergencies. Isn't that a safe and responsible thing to do, you say to yourself.
After a few weeks of telling yourself that you have mended your spending ways, you finally get your new card. A host of financial burdens seem to melt away. You no longer have to worry about your car breaking down or where to get gas money - you can always borrow the money and pay it back later.
Maybe you forgot about the personalization, the colors, and the dolphins, until one day it arrives: your credit card, your instant money.
When it arrives, you check out the terms and activate it. You then put it into your wallet - for emergencies only.
Now that you have the credit card in hand, ready to go, your mind drifts to what you can buy with it. You'll definitely pay the balance in full each month, so a few little purchases won't hurt. And isn't it better to use it and pay it off than to let it gather dust in your wallet? A few small, inexpensive items, and then only for emergencies.
The first payment slip comes in from the bank. It is asking for a number dangerously close to the number on your pay check.
And so you enter the cycle of debt in earnest. Instead of paying off the entire balance, which you told yourself you would do each month, you pay a minimum payment. Instead of cutting your spending, you continue to use the card and pay only this small amount.
You are driving yourself deeper into debt. Soon, your credit card will have reached its maximum balance. This can leave you in a financially vulnerable position, so you get yet another credit card. Without changing your spending habits, however, you are just perpetuating the problem. Soon, you have to maxed out cards and are making only minimum payments on each.
Maybe one more card? That way you can pay off the other two and make payments on one. But that spirals out of control, and you are making minimum payments on not one, not two, but three cards. And, to make it worse, your great introductory rate has expired. It has shot up to twenty percent. Don't even think about getting a late charge. Your "few small purchases" have turned into thousands of dollars in debt, and it's growing each day.
You fool yourself to prevent the reality of your increasing debt and lowering credit score.
You make plans to pay off the entire balance with tax refunds or bonuses. But these get sucked up in everyday purchases, and still your debt grows.
The car payment is due, the mortgage is due, and you need a new water heater. The cards remain unpaid and your mailbox is as full as your missed and avoided call list. You have lost control.
Start boldly and decisively to take back control. Take your three credit cards and cut them up. Be merciless. If you work hard to pay them down, you don't want the temptation to start using them again. Once you've paid them off, you want them out of your life.
If you do decide to keep one card, make a concerted effort to pay it off in full. This may mean making some sacrifices, but it is well worth it to dig yourself out of debt. Use if for emergencies, but make sure you have a clear definition of emergency. A great sale on shoes is not an emergency. Fixing your car so you can get to work is.
Your next step - and you're not going to like it - is to talk to your creditors. Their goal is to recoup their money: if you cannot pay the entire amount, they would rather get something than nothing. Most will be willing to work out a repayment plan that you can afford.
Be honest about how much you can afford to pay. They will work with you once, but if you get in over your head again, they may just pass you on to a collection agency.
You were living in a world of money that you fictitiously owned. The reality is that money was real, and you really do owe it back to someone.
When overcoming debt, it takes time and effort. You can't pay off thousands of dollars of accumulated debt in a week. It will take time. This time, meanwhile, can be put to good use. You can rethink your spending habits and create a workable budget.
You may be overwhelmed by the amount of time it will take to become debt free. The truth is that you cannot afford not to become debt free. Continuing with your current habits will only make matters worse. It may be easy to rack up the debt; paying it off takes more control, effort, and persistence.
Credit repair is real. It just takes a strong sense of reality, responsibility and understanding of how the problem came to be. Learn how to fix your life by restoring your credit rating. - 16931
About the Author:
A great way to repair credit is with the credit repair technique and reviewing your free credit report.
posted by Edgar at
02:11
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home