Who Should You Turn to When Faced With Credit Card Debt?

Significant credit card debt can be debilitating, and many households may face difficulties creating a budget that allows them to meet their needs, while still enabling them to chip away at their balances. Those who carry cards with high interest rates may face another set of challenges if they can only afford the minimum payments, as they may have a more difficult time making a dent in their balance. When debt becomes too burdensome and reducing a high balance seems impossible, it’s time for consumers to seek assistance.

However, many often don’t know where to turn for help. There are a few steps borrowers can take to start the debt repayment process.

First, it’s important for consumers to contact their lender. Many avoid this path due to embarrassment or a misconception that there is little a credit card issuer can do to help them. Consumers should remember that lenders receive thousands of these calls over the years, and they are trained to help borrowers seek solutions. After all, they want to get paid as well. It may be beneficial to ask for an interest rate reduction. This request is most typically honored for consumers that have a positive payment history and a decent credit score.

Second, consumers may also consider exploring balance transfer credit cards with favorable rates. Many lenders offer balance transfer products that offer zero percent introductory rates that last between three to 24 months. This may greatly help consumers pay off their balance in full and escape their debt. Before going this route, however, it’s important for borrowers to calculate how much they will need to pay monthly to eliminate their balance before the introductory period ends. Otherwise, a new rate may kick in before the balance has been paid that is higher than the previous card.

Speak with a credit counselor

Credit counseling is another crucial path for borrowers who are unable to unload their debt. Professionals can determine whether borrowers can eliminate balances simply through smart budgeting and cutbacks, or if a debt management plan, consolidation or bankruptcy are more favorable options. Counselors can also educate consumers on effective tactics to help them avoid incurring this type of debt in the future.

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