Credit cards are exceptionally easy to break out and pay for items that we want or need. Unfortunately, a little too easy. Many people are faced with credit card debt that seems insurmountable. Once the steep interest rates begin to grow, even responsible spenders may begin experiencing difficulty meeting even the minimum payment on time.

 

According to Value Penguin, Americans 35 years old and younger lug around an average of $5,808 in credit card debt. When that’s added into a monthly budget that already includes housing, a car and, most likely, student loans this load can be more than many can bear.

 

Are you saddled with steep credit card debt, struggling to make the minimum payments along with your other bills? Do you often wonder if you should file bankruptcy and start over? Here are 5 tips for managing credit card debt before bankruptcy.

Accept the Truth.

It’s almost impossible to reach smart decisions without all the facts. Don’t leave your credit card statement laying on the counter, unopened. Sit down and closely review every one of your statements. Take note of the balance, the limit and the monthly payment. Add it up and compare it to your income. This knowledge, while painful to face, is your starting point for taking control of your finances.

Examine Your Avenues.

Think about your spending in comparison to your credit cards. Are there items you could slice out of your routine that would free up more money? Or is all of your income spoken for with set monthly bills? Talk to a credit counselor such as the National Foundation for Credit Counseling (NFCC) to gain insight into your next financial move.

Negotiate Your Options.

A clever financial maneuver is to call your creditors and negotiate. Will they take less than what you owe? Are they willing to lower your interest rate? Debtors will frequently work with their clients and help them create a debt settlement plan they can manage, forgoing bankruptcy.

Commit to a Budget.

Create a clear picture of your current finances. If the picture gives evidence you can dig out from under your credit card debt, set a budget. Trim all extras off and think of creative ways to cut spending. Consider finding an extra job in your spare time, or sell some of your belongings and pay it on your outstanding debt.

 

If you decide that bankruptcy is your best choice, begin saving the money to file. And whatever you do….

Stop Charging!

While this may seem like a given, many people feel that they are in so deep, they may as well bury themselves completely. If, after you have analyzed your debt and gotten opinions, you feel confident in paying off your debt eventually, don’t charge another dime on your credit cards unless it is a life-or-death situation.

 

This goes the same way if you are filing bankruptcy. If you plan to file, do not keep charging on your credit cards, thinking you won’t ever have to pay it back. This isn’t necessarily true. If your creditors can prove you were never planning to pay back the debt, it is possible for it to not be included in your bankruptcy.

 

Whether you plan to pay your credit cards or file bankruptcy, stop using them!

 

Dealing with mounting credit card debt is scary and stressful. A savvy consumer, however, will accept that only by facing the debt, talking with creditors and counseling services, and making a plan can he or she handle the debt effectively and progress to a point of financial stability. It may not happen fast, but it is possible. These 5 tips are powerful game changers that set you on a successful financial path.