Debt Management Advice: Make Your Own Repayment Plan

The commercials run incessantly on your local and national television stations imploring you to do something about that massive amount of debt. They call to you and tell you that you can get out of debt easier and quicker than you thought by just making a simple choice. You can "reduce your debt by up to 70%" or "pay your debt off for pennies on the dollar". Anybody would jump at these claims if they were real, some jump anyways, but there is a better way for you to pay off your debt the right way.

The biggest mistake that people make when trying to repay their debts is that they refuse to talk to the very people that could help, the creditor. This is especially true with credit cards as many people believe that they will begin raising your interest rates just for making a phone call about help. This is not true, especially today when credit companies must abide by the new laws to help you in repaying your debts to them.

What you should do when you face a large amount of credit card debt and you don't see the light at the end of the tunnel is call the credit card company and be honest. Tell them about what led to your situation and provide some history of why you are in this situation in relation to the loss of a job or unexpected medical bills, etc. Explain that you want to pay off your debt in full, you just don't see it being possible with the terms as they are.

Credit card companies are smart, they realize the benefit of getting something rather than nothing and they all have plans for this sort of situation. What you have to do is have the numbers ready for them when they call, explain why your debts got out of control and why you need their help. You will likely have to agree to repay the debts in full with a lower interest rate over a set period of time and most companies will then require the card to be closed.

Though the closing of a card may slightly harm your credit in the end it will be more than offset by the fact that the amount of debt is off of your credit history. In the end you won't reduce your debt by 70% or pay pennies on the dollar, but you will save a lot of time and money over the original terms of your repayment. Take advantage of what the credit card companies offer and pay off your debts for as close to the principle as possible.