Whether you have a few thousand dollars or a few hundred thousand dollars in credit card debt, you probably want to eliminate that debt as fast as possible. Your credit card debt could be affecting your emotional wellbeing, as well as your finances.
If you are worried about unmanageable credit card debt, here are three things to keep in mind that could help you better manage your financial situation in the future.
1. Sometimes a short-term loan is a better idea.
Credit card debt comes with high interest rates, which means that it could take years to pay off your credit card bills. If you're buying a few thousand dollars of furniture for your home, and it will take you a year to pay that off, you might want to consider getting a short-term loan rather than putting it on your card. It could save you hundreds of dollars in the long run.
2. Getting into debt is the easy part: Getting out is difficult.
There's an old saying that the doors to the underworld lay wide open, and it's easy to jump right inside; coming back into the light of day, however, is a different story. The same is true with credit cards. If you're not careful, it's easy to find yourself overwhelmed with massive bills and debt.
3. Your debts will lower your credit rating.
When you have a large amount of credit card debt, it will hurt your overall credit score. This means you'll have a harder time getting approved for a vehicle loan or a home loan. The best way to maintain your credit rating is to keep your balances below 30 percent of the amount of credit you have at your disposal.
Missed payments will make your credit score even worse. To protect your credit rating, try to never miss a payment.
Are you in a difficult credit card debt situation?
When your credit card debt gets so high that you don't see how you'll ever pay it off, you might want to explore various debt resolution strategies. Although bankruptcy won't work for everyone, if you can qualify for Chapter 13 or Chapter 7, it could be your best shot at becoming debt-free.