How to Know When You Need Credit Card Debt Relief

Your credit cards are nearly maxed out and you’ve been robbing Peter to pay Paul, as the saying goes, to barely keep up. You haven’t been able to manage on your own very well, but you’re unsure whether you need professional help. Here’s how to know when you need credit card debt relief.

credit cards

Do You Need Help?

In general, you should seek debt relief if you have zero hope of repaying unsecured debt such as credit cards or medical bills within five years, even if you cut spending to the nub. You should also consider it if how much you owe equals half or more of your gross income.

Other signs you should consider debt relief include:

  • You’re maxed out or over limit on your cards. If you don’t pay your balance every month, this can happen quickly. If it does, expect higher interest rates, which will make it even harder to erase your debt.
  • You can only afford minimum payments. If you can’t handle more than the minimum payments – the lowest amounts you can pay and retain your card – your debt is worsening, and you likely need help.
  • You’re late or missing payments. It’s a no-no to skip payments, as doing so is very damaging to your credit rating. Late payments lead to fees and increase the amount you must pay to get caught up. If you’re regularly late or missing payments, a debt relief  program may be the best option for you.  
  • You’re paying your plastic with other kinds of debt. If you’re using repeated balance transfers, cash advances, payday loans, or the like to pay your credit card bills, you do need help.
  • Your credit score starts dropping. Your score will take a hit if your total credit card balance exceeds 30% of your available credit. This ratio accounts for a third of your credit score. If your score starts tumbling, it’s time to do something.
  • New credit applications are rejected. Credit card issuers sometimes know when things are out of hand before you do. If high credit card balances are cited in your rejection letter, it’s a sign that you need serious help tackling your debt.
  • You’re hiding your debt. If you feel like you have something to hide, that should tell you that you’re in trouble deep. Maybe you no longer even open your credit card statements, or you tell a friend an untruth about why you’re unable to, say, rent a car while on vacation. 
  • Your debt is prohibiting you from saving. It’s no fun just working to pay bills. The more you spend on your balances, the less you can save. Without savings, you may have to create even more debt to get out of an emergency. This is not a favorable scenario.
  • Your debts are a constant worry. If you’re always stressed out and anxious about your debt, that’s a sign that you’re in over your head. Seek professional help with your financial situation.

 

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There are multiple ways to erase your debt, depending on your situation. Options include employing the avalanche method, which eliminates high-interest debt first, and the snowball method, which targets the lowest balance first. If these strategies don’t work, you need outside help. Credit counselors, for example, can help you organize and manage your finances. 

But if your situation is dire, that’s how you know you need credit card debt relief. Contact an agency such as Freedom Debt Relief to help you get back on the right financial track today. You and your creditors will be so glad you did.

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