Part III: Credit Cards & Bad Debt

UK households are currently indebted to UK credit cards to the tune of £200 billion. It is, therefore, a very sad fact that large numbers of people in the UK get into debt as a result of having being issued a credit card. In some cases it could be argued that the credit card companies are at fault for making credit cards available to people who obviously cannot afford them. Notwithstanding this, in the event that you leave a credit card debt unchecked, you will be held personally liable for this and it could well affect your life for years to come. As such, if at any time you feel that the level of your credit card debt is becoming overbearing, you need to take immediate steeps to counter this.

In order to overcome your credit card debt problems you can:

• enter into agreement with your credit card company to repay an amount affordable to you, which may be less than the minimum monthly repayment;
• enter into an agreement with your credit card company that they do not charge you excessive interest and default interest while you arrange to repay the outstanding debt, on the understanding that you will repay the then outstanding principal debt;
• discuss your circumstance with a debt counsellor, who can act on your behalf talking with your credit card provider to come to some arrangement for you to repay your credit card debt. You then need to make sure you make the payments as agreed to your debt counsellor, who will then arrange for these payments to be made to your credit card provider.

Keep in mind that credit card debt counts as being one of the major reasons people cite for stress and is often seen as being a contributing factor in a number of suicides each year. Do not let your credit card debt become all consuming by remembering to use your credit card sensibly.

Improving Your Bad Credit Rating

If you find yourself in the position where you have a bad credit rating as a result of your misuse of your credit card, do not think of it as the end of the world – it is possible to improve your credit rating. You can start to do this by using prepaid credit cards and by making sure you repay all of your outstanding debt on time according to the agreement you have with your creditor. Keep in mind that the maximum period you are likely to have a bad credit rating for in the UK, even in a worse case scenario, is 7 years.

Suggested Reading:

• Bad Credit History Credit Cards
• Using A Credit Card To Build a Credit History

Next Article In Guide:

• Loyalty Programmes
  Brief article on the financial benefits that the consumer can benefit from by the use of credit cards.