| High Credit Card Charges |
| By Credit Federal |
Published
12/30/2007
|
Debt Help
|
|
|
|
|
Should You Stop Paying Credit Card Charges?
It's all too easy to do, and a lot of people do it... They spend too much money and run up high credit card bills and some even stop paying balances. What happens when you simply stop paying credit card bills?
First of all, simply stopping payment is not the best solution. So; until you decide what is the best (or only) solution for you, you should continue paying at least the required monthly minimum payments.
Stopping payment may be the simplest solution, but it comes with a lot of woe. Initially you'll be bombarded by phone calls and/or mail about your account being past due. This may cause you to dread the sound of your telephone ringing or make your walk to the mail box burdensome. Even if you endure those hassles by telling the creditors not to call you any further, once the creditors realize you won't respond to their letters they'll turn your account over to a collection agency. Even if you ignore the collection agency, you cannot ignore a judge if your creditor decides to take legal action. At such point you're back to facing your debt instead of ignoring it. Hence, you haven't gotten anywhere except maybe you've made matters worse by running up more interest, late fees and other extra penalty charges.
So what are better solutions?
Credit counseling, debt settlement or; as a last resort, bankruptcy.
Quick Pros and Cons:
Credit counseling can make your monthly payments lower, and can help protect your credit score. The downside is that it will take longer to get out of debt than the other options.
Debt settlement can make your monthly payments even lower than credit counseling offers, and can reduce the overall total you have to pay back. The downside is that it can severely damage your credit score for up to 7 years, which can prevent you from being able to get other lines of credit during that time.
Bankruptcy can get you 100% out of a lot of your debt. The downside; of course, is that it will destroy your credit and possibly your reputation and self-esteem.
What are other options?
If you're a homeowner, you could get a debt consolidation loan. If you're a nonhomeowner but have a vehicle with equity, you could use your vehicle as collateral for personal loan or simply refinance your auto. With a loan, you could payoff credit cards which have higher interest charges. Another idea is to balance transfer existing credit card charges to a 0 introductory period credit card. Doing so could give you up to 6 months to payoff; or to lower, the total debt before interest charges begin.
In summary, instead of stopping payments altogether you need to carefully review each of the alternatives before you choose the option that is right for you. Meanwhile, continue making at least the monthly minimums. In the meantime if you need a quick loan to make a payment, consider a no collateral, no credit check loan.
|
Related Articles
Email this article to a friend - click here
Webmasters: Free Credit Content for Your Website!
Multiple ways to use our financial content:
*) You can use our RSS Feeds for automatic insertion and updates
*) You can simply link to this article
