Five Signs Someone Has a Credit Card Problem and How to Resolve It, from American Financial Solutions

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From job losses and reductions to overwhelming medical bills, the credit card debt burden continues to clamp down on people. But, says American Financial Solutions, there are ways for consumers to pull it back under their control.

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American Financial Solutions

Debt problems may be due to job loss, high medical bills, higher student loan payments, and simply not enough money.

According to the November 7, 2012 Federal Reserve Statistical Release, there is good news and bad news for many Americans. People are charging less on credit cards and borrowing money to purchase tangible items, such as homes and automobiles. However, more people have credit card payments that are 60 days or more overdue. According to American Financial Solutions (AFS), a non-profit credit counseling agency, there are many reasons people may be falling behind on debt, including: job loss, high medical bills, higher student loan payments, and people trying to bridge the gap between what they earn and what they need.

Sometimes it is difficult to know when using a credit card changes from a beneficial reward for having good credit, to a complete liability. Below is a list of warning signs that indicate someone may have a debt problem.

  • Increasing credit card balances, rather than decreasing balances.
  • Making only the minimum payments on cards.
  • Checking the account balance on a regular basis, to determine if there is any available credit.
  • Receiving late fees or over-the-limit fees on their credit accounts.
  • Receiving collection calls.

There are options for people who are dealing with the credit card issues described above. They range from debt consolidation to the extreme of filing bankruptcy. Barbara Mascarin, Director of Operations for AFS, advises, “If someone has a debt problem, we would recommend they contact a non-profit credit counseling agency like AFS and speak to a certified credit counselor.” Credit counseling agencies can help people prepare a manageable budget, while also developing options for paying down debt.

“Some options may include a plan to pay off the debt on their own, or a debt management plan which consolidates all of their debt payments into one convenient monthly payment,” said Mascarin. Debt management plans help people get out of debt in a much shorter period of time as a result of concessions from the creditors which can include, reduced interest rates, waived fees and in some cases a lower monthly payment.

There are some other avenues people may want to explore before making the call to a credit counseling agency. Those include contacting the credit card company and asking for the interest rate to be reduced on an account. While this will not lower the amount of debt you currently owe, it will prevent it from accruing as quickly.

Also, try setting aside a certain amount of money for paying credit cards each month. Work on paying off the card with the highest interest rate first, by allocating the most money to that card. Send the rest of the cards minimum payments. Once the first card has been paid off, allocate that money to the next highest rate card. You continue this pattern until all debts are paid in full.

Having 30, 60 or 90 day late payments on your credit report is damaging and makes it more expensive to borrow money, to rent a home or apartment, or even have lower auto and home insurance rates. Review the warning signs of a debt problem and if they seem familiar – contact a certified credit counselor today, before the bills sprial to out of control.

American Financial Solutions (AFS) is a non-profit 501(c)3 financial education and credit counseling agency that helps people find solutions for managing their money and improving their financial lives. Since 1999, AFS has helped individuals across the United States through one-on-one counseling, classes and the use of debt management plans. AFS is a member of the National Foundation for Credit Counseling (NFCC) as well as the Association for Independent Consumer Credit Counseling Agencies (AICCCA). AFS is also accredited by the Council on Accreditation (COA) and has an A+ rating by the Better Business Bureau. Find us and add us on Facebook, Twitter and Google+.

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Becky House

Becky House
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