Warnings from those previously singed and scarred holders of negative credit ratings told you not to get a credit card, but those pre-approved credit cards kept slithering into your mailbox.
You did not heed their warning. You tore that envelope open “just to educate yourself” if you “one day” decided to get a credit card. This is the worm on the end of the hook.
You saw the leaflet with the 0% APR for the first 12 months and no annual fee, and as you looked deeper, you found that you could personalize your card with Mickey Mouse or dolphins!
You may apply with the intention of using it strictly for emergencies. Isn’t that a safe and responsible thing to do, you say to yourself.
While you wait for your card to arrive, you fortify your intention of using it only when absolutely necessary. You won’t borrow money to pay for extraneous and unneeded items.
Your way out of emergencies, your life boat, has arrived. And it looks great with the puppies playing on it.
When it arrives, you check out the terms and activate it. You then put it into your wallet – for emergencies only.
You begin buying in your mind, averaging in pay check arrival times to quiet your guilty conscience. You find a home for the new card in your wallet and go shopping, but vow to use it only if absolutely necessary.
The first payment slip comes in from the bank. It is asking for a number dangerously close to the number on your pay check.
So you change your plan. You’ll pay the minimum balance this month, and really start using the card only for emergencies. But you continue spending. The next month, you can’t pay more than the minimum once again.
Eventually, you want to buy more and pay less. You sign up for another card. You?re approved. You buy and pay the minimum on two cards.
You buy more and pay the minimum on three cards. Before you know it, those precious twelve months are up, and you are buried in 23.6% APR rates and late fees. Your couple of hundred or thousand dollars owed has now tripled, and it is still skyrocketing!
You go on paying your minimum payments, ignoring the damage to your credit score. You’ll pay it off eventually, right?
You make plans to pay off the entire balance with tax refunds or bonuses. But these get sucked up in everyday purchases, and still your debt grows.
Soon, you have financial obligations that are pressing on you: how will you pay your heating bill in the winter? How will you pay for the increase in gas and commuting costs? What happens now if your car needs repairs? All that, and creditors calling and sending overdue notices. You cannot pay your debt. You no longer have control of your financial situation, and this affects every aspect of your life.
The only way to help yourself is to radically change your spending habits. Cancel the cards, even if you still have room to spend. If you absolutely need one, do not carry it in your wallet. Better yet, get a debit card, which gives you the freedom and convenience of the credit card without the high risk.
If this is too much severing of ties, keep one card and pay it off first. This will be an emergency card for bills that need to be paid. In fact, defining what constitutes an emergency prior to using it will help prevent miscellaneous spending.
Your next step – and you’re not going to like it – is to talk to your creditors. Their goal is to recoup their money: if you cannot pay the entire amount, they would rather get something than nothing. Most will be willing to work out a repayment plan that you can afford.
Be honest about how much you can afford to pay. They will work with you once, but if you get in over your head again, they may just pass you on to a collection agency.
You were living in a world of money that you fictitiously owned. The reality is that money was real, and you really do owe it back to someone.
When overcoming debt, it takes time and effort. You can’t pay off thousands of dollars of accumulated debt in a week. It will take time. This time, meanwhile, can be put to good use. You can rethink your spending habits and create a workable budget.
Expect this process to take years, if not longer, to fix depending on the amount you owe. Not only have you established a hefty debt, but you have put your credit score in front of a trigger happy firing range. Those holes take time to repair.
Credit repair is real. It just takes a strong sense of reality, responsibility and understanding of how the problem came to be. Learn how to fix your life by restoring your credit rating.
