Credit cards offer a convenient way to pay for items and services without worrying about having cash on hand, especially while you’re traveling. They can also help you keep track of your expenses while building good credit. One of the pitfalls of using credit cards is that revolving credit can lead you to spend beyond your means, and the fees can build up quickly as your balance and monthly minimum payments increases. If your credit card debt has spiraled out of your control, there are some immediate steps you can take to mitigate the problem. Besides offering tax and bookkeeping services, your local Denver accountants can also provide debt counselling to help you get back on track.
1. Make a list
The first step is to write down everything you owe to all of your creditors. Seeing exactly how much you need to pay and to who makes the process easier to visualize and manage. Also make note of the interest rate for every card you have.
2. Organize your debts
Figure out which debts have the highest priority and need to be paid off first. Credit cards with high APRs (annual percentage rates) should be dealt with immediately, as you’re getting charged more each month on what you owe. Focusing on aggressively paying down the top-priority cards, while continuing to make payments on the others, gives you a clear and attainable financial goal. Debt counselors can help you devise an effective action plan so you don’t feel overwhelmed.
3. Create a budget
Tally up all of your expenses and compare it with your income. This will help you decide how much you can afford to repay on each credit card every month. Use the Bankrate credit card payoff calculator
to calculate how long you think it will take until you’re debt-free to get a reasonable sense of your timeline. Paying attention to where your money goes on a weekly basis will show you where you can reduce spending to save money. Looking over your bank and credit card statement from the last year or so will give you an accurate feel for what your main expenses are.
4. Talk to your creditors
Once you’re organized and know how much you can reasonably pay on your credit cards, contact each of them to explain your situation. It’s possible to negotiate a lower-interest-rate card or to decrease your current interest rate. Debt advisors can assist with this step to streamline the process.
5. Get advice from a professional
There are several avenues you can take to resolve your credit cards debt, including bankruptcy, debt consolidation, and debt settlement. An accounting expert can walk you through each process and explain the benefits and disadvantages of each. Knowing and understanding all of your options will help you take the wisest course of action for your particular situation.
Even just having a professional offer guidance and advice on how to manage your payments and create a budget is helpful. Contact Bloch, Rothman, and Associates at 303-321-7160 for a free initial consultation on how to begin resolving your credit card debt