8 Things Not to Do if You Have Big Credit Card Debt

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Every month you look at your statements. Every month they get bigger and bigger. You might have even given up on the idea of living your life debt free. However, if you have big credit card debt, you’re going to have to end up paying your creditors one way or another. One of the best things you can do for your finances is to get your credit card debt under control before it gets out of control. Here are some things you should definitely not do when the credit card debt piles up.

Ignore It

It should go without saying that you can’t make the problem go away simply by ignoring it. However, that doesn’t stop a lot of people from doing just that. You need to get a plan to get out of debt. Ignoring notices or just continuing about with business as usual is one of the best ways that you can ensure the problem will get worse.

Pay the Minimum

The minimum balance is not calculated to have you pay off your debt. This is a mistake that many sometimes make. When your debt load is high, make the highest payment that you can realistically make, not the least. This is the only way that you’re going to transform big credit card debt into debt freedom.

Rack Up More Debt

If you’re swimming in deep credit card debt, it’s time to stop spending. Using the cards will only make the problem worse. You need to take drastic actions to stop yourself from getting further into debt. Focus more of your energies on getting the debt paid down.

Consolidating the Wrong Way

Many people have so much debt in so many different places that consolidation seems like a good option—and it can be. However, all debt consolidation plans are not created equally. You should never consolidate with a high interest loan. Further, you need to be clear on all terms, conditions and fees. Your consolidated loan might not be a much better deal than negotiating with and paying off all of your creditors independently.

Counseling the Wrong Way

Credit counselors can help people to get their debt under control. They can also be a needless additional expense if you’re not smart. High rates or payment up front are generally signs that you’re dealing with a less-than-reputable counselor. The National Foundation for Credit Counseling is one of the best places to start your search.

Being Too Quick to Consider Bankruptcy

Bankruptcy is definitely a way to get out of debt, but it’s a method of last resort. You might get out from underneath the debt, but there are few things that look worse on a credit report card than bankruptcy. Carefully consider your options before resorting to bankruptcy. Remember, it erases most debts, but also carries a number of long-term consequences.

Borrow From Friends and Relatives

Borrowing from friends and relatives might seem like an attractive option, but it’s generally not. You’ve already established that you have trouble paying back your debts. Why strain relationships with friends and family members on top of that? Skip the family and consider a consolidation loan if you’re looking for a way to make all your different credit card payments into a single monthly payment.

Misuse Balance Transfers

A balance transfer card may be a good move. If you can pay off the credit card before the introductory rate expires, this can be worth it, as you’re both making payments and reducing your debts. Doing it more than once, however, isn’t a wise move and can result in you doing little more than ruining your credit score.

Nicholas Pell
Nicholas Pell is a freelance personal finance writer based out of Hollywood, California. In addition to Credit Sesame, he also writes for Mint Life, Wise Bread and Business Insider, specializing in showing people how to live large on a modest budget and get out of debt. He has also reported extensively on the mortgage crisis, student debt bubble and health care in the United States. Pell lives a stone’s throw from the final resting place of Cecil B. DeMille.

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