You’ve had good credit for the last several years. You could charge anything with a head full of confidence. You never missed a payment and never were subject to a late penalty.
Now, you’ve been laid off or you have to deal with a substantial pay cut. The debt is still there, only before it was manageable. Now, it’s just unbearable.
We all don’t start out with horrible credit; life throws its curveballs and we are subject to its mercy. Watching your spotless credit morph into either mediocre or bad credit can be heart-wrenching. But fortunately for you, it doesn’t have to be that serious. There are ways to manage a shift in finances or a large upcoming credit card bill. Don’t be scared, look the debt straight in the eye, and follow a few of these guidelines.
Know What You Owe. You can’t play the game if you don’t know where you stand. Take some time out of your day and actually look at your credit card statements and how much money it will take to clear 10% above the minimum balance. Also, take note of the interest rate your paying and if any other unauthorized or miscellaneous fees pop up.
“You may find out that you owe less than you thought, or you may find out that owe more than you’re originally thought. Either way, it’s best to know your situation so you can proceed with caution,” said an analyst from Credit-Land.com, a leading credit card research web site.
Call a Time-Out On Your Credit Cards. If you can’t afford to pay the bill, stop using them. Don’t lead yourself deeper into debt by continuing to use your credit card for payments that you can’t cover. You may have grown accustomed to using your gas card, but it’s smarter to not dig yourself into a financial hole, but rather to make good money decisions. A good money decision would be to use cash and debit until you find another job. Credit cards should be used in case of an emergency.
When you’re unemployed everything can seem like an emergency, but it’s important to differentiate what really constitutes an emergency, i.e. a nice dinner for two vs. a child in the hospital. Also, make sure to keep in contact with your credit card company. They have millions of clients, all going through the same thing; if you call and speak to them they might be able to offer you a break. "Don’t just pay, whether it's credit cards or your mortgage lender or the bank that has your car loan," the Credit-Land representative said.
"Establish a relationship, and it will help you and your debt.”
Get Creative About Making Money. With garage sales, the websites eBay and Craigslist, you can sell your trash and get a few pieces of treasure in return. Also, it may be in your best interest to get another job, restaurants are a good place to start if you are strapped for cash. Nightly tips can help keep the creditors from breathing down your neck. If working at a restaurant isn’t for you, maybe turn your hobby into an income. If you’re a musician, solicit clubs that pay for entertainment, if you like to bake, host a community bake sale. The possibilities are endless.
Getting laid-off is a real possibility in our economy. If you are subject to a lay-off, don’t neglect your debt. Analyze your situation and make a conscious effort to pay it off. It can be done!
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