Those of us who are or have been in debt know the drill. Money gets a little tight so we rely on the credit card. Maybe we even splurge on a couple nights out to feel like a normal person. Then the minimum payments get a little out of reach but, what’s this? I can get another card at 8%? Great, I’ll transfer the balance and buy some time. Now we have two balances and the minimums aren’t getting any easier to pay. Suddenly a cash advance looks really attractive. Well, needless to say these stopgap measures are exactly that. Soon the dam breaks, we miss a payment or two and the credit card companies take advantage immediately. Our APR’s skyrocket and the late fees add up, making next months payments impossible. Our credit cards have us over a barrel, but before we debate this modern-day usury, here are a couple tips to manage the insanity.

1. Be Assertive! I know this might sound like a waste of time, but if you know you’re going to miss a payment date, call your credit card company and ask for an extension. There’s a good chance you’ll get it. At least you buy some time and hopefully avoid another late fee. And while you’re at it, take a stab at negotiating a lower APR. Credit card companies make money off you. If you can take your business elsewhere, they might make concessions here and there to keep you.
2. DO NOT, no matter how tempting, no matter how much it makes sense at the time, no matter what your friends say, DO NOT open new lines of credit or take cash advances to pay higher interest cards. If you’re struggling to pay one card, don’t double the stress of adding another bill each month. Worse yet, cash advances carry ridiculous interest rates. Chances are if you’re taking an advance, you won’t be able to pay it back right away, so in the long run you’ll end up paying five times the amount you take in advance.

Certainly not a long-term solution, but a couple things to consider shy of filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Attorney Adam Cerza
BankruptcyHQ.com

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