Are you facing the same problem? What have you done to overcome your financial hardship? I am sure you are indeed stressful and depressed when you don’t have enough fund to pay off your debt. You may not have idea to take any action since you don’t have cash on hand.

Seriously speaking, doing nothing is not the right step. Failure to make the minimum payment to your credit cards is in fact a DANGER to your credit score. At the same time, the card providers have the right to take legal action on you. Besides, the lenders can also sell your accounts to the debt collection agencies.

You don’t need to face all the above mentioned consequences if you take proactive steps to overcome the problem. Let me share with you some possible solutions:

1. Taking up a personal loan

In order to protect your credit rating, taking up personal loan is the best solution. You can either choose to get friendly loan from someone you know or you can refer to your credit union for financial assistance. Since the interest rates for credit cards are usually high, it will be good if you can obtain personal loan which offers lower interest rate. This will help to reduce your total financial cost and at the same time, you can stop all the debt collection calls.

2. Consolidating your debts into one single loan

Besides looking for personal loan, you can also consolidate your multiple debts into one single loan. The concept of obtaining debt consolidation loan is just the same as getting normal personal loan. You need to look for the licensed debt consolidation loan providers in the market and select the best deal. Once you have cleared off your credit card debt with the loan, you are reminded to stop swiping the cards because you need to focus on paying back the new loan on time.

3. Negotiating with your creditors to reduce your total debt

For those unemployed card holders, getting a loan might be hard. Don’t worry, you can try other solutions. When you can’t make the payment, don’t feel ashamed to inform your creditors about the financial difficulties you are facing. You are advised to send in the settlement letter to request for debt reduction. You are reminded to evaluate your financial position carefully and offer a settlement amount which you can afford to pay. In general, most of the card providers are willing to accept debt settlement after assessing the debtors’ financial situation.

To sum up, you must take fast action in solving your credit card issues before it is too late. It is not worth for you to face the music as there are many opportunities you can make use of to change the situation.

Do you know that you can actually lump all the outstanding balances on your credit statements and make them into one single debt? Let me share with you some practical steps:

Step 1: Analyze your financial ability

The very first thing you must do is to assess your current financial situation. You know your financial position most. I am sure you have multiple credit cards on hand. What you need to do is to compile all your latest credit card statements and list down the outstanding amounts as well as the interest rates one by one. By having all the details, you will be able to analyze your financial ability easier.

At the same time, by knowing all the interest rates, you are able to decide whether debt consolidation can really help you to save a lot of money.

Step 2: Search for suitable loan provider

Once you have got the total debt amount, you are recommended to look for banks, financial institutions or loan providers which offer low interest debt consolidation loan. You need to spend some time to contact them and see what kind of loan packages they can offer.

If you want to save time, you can search online. Shop around to look for the best deal available. The most important is the interest rate offered for debt consolidation loan must be much lower than the interest rates of your credit cards. You need to save as much money as you can from the difference of interest rates.

Step 3: Make the right selection

You are advised to make thorough comparison between different lenders before making your final decision. There are a few matters you need to bear in mind besides interest, such as term of repayment, the monthly repayment amount, penalty for early settlement, other facilities provided, etc. Make sure that you select the right package based on your REAL financial needs. Only obtain the loan amount according to your debt. Don’t apply for extra loan.

Step 4: Pay off your debt with new loan

Obtain the loan and pay off all your credit card debts. You are reminded to ask your new lender to deposit the fund into your saving account. After that, you are the one who is responsible to make the payment to your creditors. You are reminded not to let your lender to deal with your creditors directly. This is to protect your privacy.

An IMPORTANT REMINDER here, do not swipe your credit cards anymore after you have zero balance on your statements. If you still don’t control your spending habits, you will end up with more financial burden in the future. Having loan doesn’t mean that you become debt free instantly. You still need to pay the repayment monthly. Consolidating credit card debts is just to assist you to save some costs.

Last but not the least; if you don’t want to obtain additional loan to erase your current debts, you still have another alternative. Using the consolidation concept, you are advised to consolidate your credit card debts and transfer all the outstanding balances onto one credit card.

By doing so, you are actually transferring the balance of high interest credit cards to a card which offers low interest rate. If you always shop around, you can even find some lenders which offer zero interest rate for the first 12 month.

• Debt settlement plan
• Credit counseling
• Declaring bankruptcy

Many people are wondering whether they can really resolve their credit card debt with other more constructive methods. The answer is YES.

There are other useful options waiting for you without damaging your credit. The above mentioned financial options are not ideal because all of them will leave negative impact on a person’s credit file. As a result, let me show you other option:

Option 1: Tax Refund

For people whose income took a hit in 2009, you are probably entitled for larger tax refund this year. In average, every American’s tax refund is about $2,700. What can you gain from there? You are advised to prepare your tax return online immediately. Once you have obtained the additional fund, use it to pay off your credit card debt.

Option 2: Obtain Personal Loan or Consolidate Your Multiple Debts

For people who can’t afford to pay back the debt with the current financial situation, you can consider getting help from your friends or someone you know. Borrow the money from them to pay off your high interest credit card debt. Besides relatives and friends, you can also look for personal loan offered by your employer or other financial institutions. Getting friendly loan or company loan will not affect your credit at all.

If you can’t get friendly loan or personal loan, you are encouraged to contact a non profit debt management organization to work out a debt consolidation plan. The professional counselor will be responsible to assist you to consolidate all your outstanding balances into one single loan with much lower interest rate.

With the professional assistance, you will be able to utilize the loan to pay off all your existing debts first. When you get rid of all the outstanding, you can then focus on paying back one single loan.

Option 3: Create your own stimulus package

In 2010, the Federal Government has no plan to give out stimulus package to their citizens. Without the “backed up” fund from the government, you still can survive on your own. Be creative! Create your own stimulus package to raise CASH. You are find many ways to get extra income, such as getting a part time job, selling off luxurious items or car, refinancing your house, etc.

Besides, work on a proper budget and follow it strictly. You can cut down your daily spending, especially on groceries and entertainment. At the same time, you are advised to place an expensive cash value insurance policy with a low cost term policy. By doing so, you are required to pay lower premium but with more coverage. Indirectly, you are building up more cash for yourself. Read more – Eliminate Credit Card Debt For Good as Your Personal Stimulus Package

To sum up, we need to be flexible. Don’t just follow what people are doing. In order to become debt free, there are many ways you can apply and it is not necessary to affect your credit score.