At the end of 2008, the average credit card debt of a US household, whether they have a credit card or not, was
Dealing with credit card debt is a monthly burden on a lot of Americans. Some manage; some don’t and continue
to get sucked into the credit card debt trap. What happens when people reach an all-time low? How will they get
back on the road to credit card recovery?
The first step in credit card recovery is admitting that you have a problem and seeking professional help. A lot of
consumer groups and non-government organizations offer free or low-cost counseling services for credit card
recovery. They help consumers not only find a way to pay off their debts but also address all financial and
psychological problems they may be having that is reflected on their credit card debt.
The second step to credit card recovery is being responsible or taking charge. Ask for your credit history from all
credit card bureaus (Experian, Equifax and TransUnion) and review them closely. Make sure that all information is
correct and accurate and if you find anything wrong with the report, do something about it. Credit card recovery is
not easy but you need to be patient about it.
The third step to credit card recovery is debt reduction. There are two ways to do this. The first method of credit
card recovery (DOLP) allows you to pay off the smallest debts in your balance first in order to have an immediate
reduction. This method also reduces the number of cards you are paying as quickly as possible, therefore, keeping
late payment fees on multiple cards from adding up and giving a positive reinforcement in the process. Another
credit card recovery method is aimed to let you off of higher rate debts, allowing you to save more money and pay
off your other debts faster. This is done by paying off the balances with the highest interest rates first. This is
the most recommended since most debt calculators are programmed to pay off the highest interest rate debts first,
which is really more practical.
The last and final step is establishing new spending lifestyle and payment habits. The only way for credit card
recovery to work well is if you change the way you were using your credit card and dealing with finances. Learn to
use your credit card with caution and have your financial life planned and organized. This way, you can keep track
of your credit, and eventually, your finances. Credit card recovery is not a fast and easy thing. You’ll
need to take it one step at a time.
Source: Credit Cards For People With Bad Credit Rating
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