Credit Card Debt Help

There is no doubt that some Americans are carrying a lot of credit card debt - and that can sometimes lead to trouble. Here we're going to discuss some of the options you have when it comes to managing your credit card debt. For example, credit repair services, self help, and even budgets - which are all part of our do-it-yourself debt control process.

Controlling Credit Card Debt

Here's the scenario. You've been down on your luck and you're trying to hold things together or just living large and enjoying the better things that money can buy. But now things are starting to get out of control. You look at your credit card statement and you can't figure out how you're going to get out of the hole. You need help with your credit card debt and you're not sure where to turn.

Credit Repair Services

But you've heard or read about these companies that offer credit repair services but you're just not sure if those claims can be true. Well, we're going to offer some guidance that you might want to consider before seeking help elsewhere. You see, with the sheer volume of credit card debt out there, you've got a lot of clever people trying to make some money off of other's misfortunes.

Additional Resources

And with the changes to bankruptcy law, it's more difficult to simply walk away from your credit card woes. But you've taken a big first step in recognizing that you might need some help managing your money or monthly expenses.

The good news is the single most important source of help is someone you look at in the mirror every day. That's right; you're probably in the best position to help yourself by managing your credit card spending wisely and paying closer attention to your personal finances.

Do It Yourself Credit Card Help

The method we're going to suggest here is a two step process. We're not telling you that you can't seek the help of others. We're simply suggesting a method that might work for some - a self-help way out of credit card debt. You may very well decide that this process won't work in your situation. If that's the case, we've got several other resources that can help you find a credit card debt counselor or a non-profit debt organization that can provide you with more guidance and / or education.

But our method described here addresses two large obstacles you might be faced with - the credit card debt itself and the possible need for credit repair.

Eliminating Credit Card Debt

Short of bankruptcy, there is simply no way to reduce your credit card debt without abiding by this simple equation:

Money Charged to Credit Cards < Money Flowing to Credit Card Companies

Now this might sound silly, but many of us don't follow this golden rule and quickly find ourselves swimming in debt. But the trick here is figuring out how to make payments to the credit card companies that are going to be greater than your credit card charges. Our suggestion is this - run your personal finances like a business.

Essential versus Discretionary Charges

That's right, you need to be your own chief financial officer and run your home like a business. You need to make prudent purchase decisions and completely understand the long term implications of each decision. You need to be able to separate the purchases that are essential to the smooth operation of your household from those that are simply wasteful or extravagant.

To get a good view of their business operations, most financial officers rely on a series of reports or financial statements that provide them with insights into the fiscal health of their businesses. As an individual that is trying to figure out where all the money goes each month, you need to arm yourself with the same types of tools. The most important of which is a household budget.

Managing Debt with Budgets

We've got an entire series devoted to the topic of budgets and budgeting, so we are not going to repeat all of that information here. A household budget is essential to understanding your sources of income and expenses. If you belong to the MSN network, you may already have access to Microsoft Money. Another good budget software tool is Intuit's Quicken.

If you don't want to spend money on software, then we've got a budget spreadsheet that you can download for free. For some people, the spreadsheet is all you will ever need. For others it is a good starting place.

Credit Repair Help

So the first phase of our approach is to begin getting your future credit card bills under control by not overspending. Once they're under control, you can start to pay down the outstanding card debt you've already accumulated. The second step that we are going to discuss has to do with the accuracy of your credit report.

Credit Repair Claims

If you've been searching for credit card help of any sort, you're sure to encounter credit repair claims that seem too good to be true. The truth be told, the only thing an outsider can help you with is repairing inaccuracies in the report itself. They cannot "clean" your report, and signing documents containing false claims is illegal.

Requesting a Credit Report

Starting in September 2005, you're entitled to a free credit report every twelve months. You are also entitled to a free report anytime a company takes adverse action against you. That's the law and it's there to protect you from an inaccurate credit history appearing on your reports. You're also allowed to dispute inaccurate information for free.

In fact, under the Fair Credit and Reporting Act both the credit reporting company (Experian, Equifax, TransUnion) and the organization providing the disputed information, such as a credit card company, are responsible for correcting information on the report.

Fixing Your Credit Report

Once you get a copy of your credit report, look it over carefully for problems. If you find a problem with your credit report, then you need to get it fixed. That means you need to write to the credit reporting agency and possibly the company providing the inaccurate information. When you write to these companies, you want to keep the letter short and simple. You want to discuss the facts surrounding the problem and you want to provide copies of any documentation proving your claim.

When writing your letter, you want to be very specific as to the exact item in dispute. You should provide information that supports your position and you need to ask the credit reporting company to remove or correct the item immediately.

All companies reporting information to credit agencies are required to investigate claims in a timely fashion - usually within 30 days. They are also required to report their findings back to the credit reporting agency.

After the investigation is complete, the reporting agency must provide you with the results of their findings in writing. In addition, at your request, the agency must also send a corrected copy of your report to anyone that was sent a copy during the past six months (two years for employment purposes).

Fixing Accurate Credit Information

If you find that the information on your report is accurate, then the only way to fix the report is by establishing a good payment pattern and time. Most negative information on a credit report will stay there for seven years. In the case of a bankruptcy, the information stays on your report for ten years.

If you follow your budget and start paying down your credit card balances, then the report will start to reflect this good behavior. The sooner you get started down this road, the better.

Dispute Letters to Credit Agencies

Finally, if you find inaccurate information on your credit report, we've got a sample credit dispute letter that you can download for free. We're providing this sample letter to help you remember the types of information you need to include and give you a jump start on the letter itself by providing you with a template that you can borrow from. Just make sure you keep copies of everything you send to these companies in case a question about your claim comes up at a later date.

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