Credit cards are beneficial assets when used effectively. They can cover the cost of things you don’t have money for upfront, improve your credit score, and give you perks like cashback. Not to mention, they’re a convenient method of payment. However, when you start falling behind on your account, rack up the balance, or acquire more cards than you can afford, it becomes a problem.
Falling Behind In Current Times
There are several reasons why a person might find themselves in over their heads in credit card debt. This is particularly true in the middle of a pandemic. You or someone in your home loses their job. You run out of money to pay for things you need. You start relying on credit cards to tide you over. Although you may find a new job or source of income, things have gotten out of control.
The balances high or maxed out, late fees are added, then the interest rates kill you. You try to keep up with the minimum payments, but it’s not enough to resolve the matter. Before long, your credit score declines, the creditors won’t stop calling, and the stress weighs on you.
Chopping Away The Debt
The impact of high debts and ruined credit in your financial life is heavy. Fortunately, there are several ways you can get back on track and get your debt under control.
- Side Gigs – one of the first options is to get a side gig or second job. You can become a rideshare driver, deliver food and groceries, or cut grass in your neighborhood for extra cash. You can dedicate this money to your credit cards to get them out of the red faster.
- Sell Things – Are there items lying around your house that you don’t want or need? If so, you could make a decent amount of money to go towards your credit card debt. You can host a yard sale if you live in a high-traffic area. Another option is to place ads in online classifieds. If you have big-ticket items like used cars, jewelry, computers, or smartphones, you should look for specialized buyers as they are often willing to pay more for your old things.
- Negotiate – Most cardholders are surprised to learn how willing their creditors are to work something out. If you were a good customer before the pandemic, they don’t want to lose you. They could reduce your monthly payment or interest rates. If your balance is high or the account is in collections, they may be willing to accept a smaller settlement.
COVID Debt Consolidation
Each of the above methods for chopping down debt can help consumers get out of debt faster. Another effective solution is to work with companies like COVID Debt Consolidation. They are a financial service that offers debt consolidation loans to consumers in need of assistance. Interested parties reach out to the agency and provide details on their outstanding high-interest credit cards. A financial expert then reviews this information along with other determining factors to assess if and how much you can get approved for. If approved, the credit card balances are paid in full, and the consumers’ obligation is to the debt consolidation loan company.
As long as the debt consolidation loan is paid promptly, consumers reap the benefits. They notice that old credit card accounts are closed, so no more late payments are reported. Over time, the debt to income ratio decreases, and positive payment history help to raise the credit score. They also have the comfort of knowing their debt is under control which is mentally and physically soothing.
Sure, there are many reasons a person could end up with thousands of dollars in credit card debt. However, when it’s something as uncontrollable as a global health crisis, it can be difficult to get out of. Fortunately, solutions like debt consolidation loans help those in need get back on their feet.