Many Americans today are struggling with persistent heavy burden of credit card debt. According to the Federal Reserve, the outstanding consumer debt was $2.55 trillion, in March 2009 in America. Revolving debt, which mainly consists credit card debt stood at $945.9 billion. This can be the result of bad spending habits or poor money management of many people. If you are one among them, by the time you understand your mistakes, you will be deeply get indebted to credit card companies.

Debt accumulates and increases through interests and penalties when a consumer does not pay or even if he pays minimum amount. To clear this never ending debt, you need to act smartly by understanding the issues involved and by taking the help of a specialist counselor.

Understand minimum payment issues
Every time you receive your monthly credit card bill, your creditor mentions the total outstanding amount as well as the ‘minimum amount’ you can pay. Most of the people pay minimum amount to stop collection agents harassing them for payments. But this is where people do big mistake. The minimum payment includes interest rates, other fees and only a very small fraction of the balance amount. This means you are paying only interest and other fees.

So, if you pay only the minimum amount, you will be paying much more than you owe to the credit card company. Apart from paying more, it will take a very long period of time to make the complete payment, which becomes unbearable.

Late fee and over due interests
You will probably get sucked more in this credit card issue if you pay your bill in time or have missed a payment. Generally most people suffer paying minimum payment because it includes all the fees that they have incurred such as fine for late payments, missed payments, or exceeding the limit of the credit. They will add up every month until you pay them completely. As this happens month after month, you will find yourself in defaulters list and remember the collection agencies will start harassing you.

When brought down to this situation, most of the individuals often look to bankruptcy as the only option left. They think that it is the easy way to get out of debt. They will be unaware of the terrible consequences of filing bankruptcy.

Take specialist counselor’s advice
If you are in this hopeless situation, making minimum payments and unable to get out of the debts, approach a credit counselor. A credit counselor helps you get out of this awful situation.

He will provide options like lowering the interest rate and a loan to consolidate the loan. Lowering the interest rate would increase the productivity of your monthly payments and a debt consolidate loan can clear the debt over a defined period of time and at a rate you can afford.

Always remember, the credit card company benefits when you simply pay your minimum payments month after month. It’s never late to come out of this situation but it is better to come out as early as possible.

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