Crushing Credit Card Debt

Written By Ellise Walsh

Tue 3/29/2005 11:04 AM

There is no doubt that the recent decades have been witness to an explosion in levels of credit card debt among consumers. The relative ease of obtaining credit cards, coupled with the anemic growth of wages and the wealth of consumer products available today has pushed more and more people to spend more than they make and in essence to live on borrowed money and borrowed time. While it is all too easy to buckle under crushing credit card debt, there are some sensible steps that consumers can take to protect themselves and their credit.

Getting into debt is easy and getting out of debt is hard. That much is clear to everyone. The debt that took only days or weeks to accumulate can take years or even decades to get rid of. We�ve all heard the statistic that a small credit card balance can take 30 years to pay off if only the minimum payment is made each month. When one hears statistics like this, one is often tempted to despair and wonder if it is even possible to pay off such a crushing credit card debt.

The answer is that yes, credit card debt, even in the most severe cases, can be paid off and the individual involved can go on to a life of financial independence and stability. It does take some knowledge, some patience and some hard work, however. Knowledge of how the credit card industry works, the patience to stick to a strict payment and spending schedule, and hard work, possibly in the form of a second job, will be rewarded with the ability to put your credit card debt behind you.

Let�s start with gathering some knowledge about how the credit card industry works. Banks that issue credit cards count on their cardholders not being able to pay their balance in full each month. From the low teaser rates to those cash advance checks, credit card companies want you to spend more than you earn. One of the secrets of the credit card industry is that they make a large proportion of their income from the finance charges, late payment fees and over limit charges assessed to their cardholders. You can use this knowledge to your advantage by contacting your credit card bank and asking for waiver of these charges and a lowering of your interest rates.

Credit card banks are often willing to work with their cardholders to enable them to pay off their debt. That is because if the cardholders are forced to declare bankruptcy, the banks know that it will be difficult if not impossible to recover the money they are owed. Use this fact to your advantage to negotiate friendlier repayment terms on your credit card debt.

Once you have negotiated a repayment schedule, however you will need the dedication and patience to stick to that schedule. If you miss a payment, or if you are late, the bank may call off the repayment schedule and demand their money. This can be very damaging to your credit rating as well as your finances. Be sure you the perseverance to follow through and hold up your end of the agreement.

You may want to consider taking on a second job as a way to retire your credit card debt faster. Many people, even if they are already very busy, find that a second income helps them eliminate their debt faster than any other strategy. Even if you think you don�t have the time, researching job opportunities near your home may provide you with the extra income you need to get out from under your crushing credit card debt.

By using a combination of knowledge, patience and hard work, you can eliminate virtually any credit card debt and get yourself back on a solid financial footing.