Have Bad Credit? Here's How to Get Out of Credit Card Debt

Blog / Have Bad Credit? Here's How to Get Out of Credit Card Debt

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Woman cutting up her credit cards to get out of bad credit debt

When you have bad credit, it sometimes feels like you're caught under the snow after an avalanche. No matter how hard you struggle to reach the surface, you rarely find purchase on anything solid beneath your feet.

Such difficulties coming out on top after taking negative hits to your credit can be overwhelming to say the least. And when you owe large amounts to credit card companies, you probably feel like there's no end in sight to your financial troubles.

However, there are a few solid ways you can climb out of credit card debt with bad credit. Through dedication and taking it one step at a time, you will come out on top.

Take it Easy

If you still have a job and steady income, even the most mountainous debt can be manageable over time. Just because the number is staggering (and possibly growing day by day), you can still make payments toward it to lower it.

Your first step should probably be to remove your credit cards from your situation altogether. Cut them up if you have to so you won't use them anymore. You may not like it, but any extra money you add to your total debt can cause you even more problems down the road.

Next, you should cut out on your unnecessary expenses. Stop going out to eat, cancel your streaming services, drop entertainment out of your budget altogether, etc. By limiting your spending to the essentials only, you may actually start to improve your credit score thanks to the extra money you can put toward paying down your debt.

Reach Out to a Debt Management Consultant

Some people may reach a point in their financial woes where they recognize it could be impossible to actually pay their existing debt as is. That's when a debt management plan comes in.

First, find a credit counseling agency in your area that specializes in credit card debt reduction. By working with your credit card issuer, it's possible for your counselor to secure a lower interest rate and possibly smaller payments each month. That way, if you continue to pay the same amount as before, your credit will slowly improve thanks to your strengthened efforts to pay down your debt.

However, debt management consultants often cost you both time and a small fee each month. Be certain ahead of time that their services are absolutely necessary and that they will help you reach your goal of becoming debt free.

The Nuclear Option: Bankruptcy

Nobody likes the word bankruptcy. But sometimes, it may be your only way out of debt.

Bankruptcy can severely harm your credit score for up to a decade. Plus, you'll have to take the issue to court and will owe attorney fees. Also, some debts cannot be erased, like child support payments, student loans, and some others.

Once you have declared bankruptcy, though, you are granted something of a clean slate. Your credit card debt is no longer a major burden, and you can work to rebuild your credit score over time. After your bankruptcy is removed from your credit history, your fresh start can truly begin, and the wisdom you gained along the way can help you reach true financial success in your future.

For more financial tips, advice, and discussion, check back next week on the Atlas Credit blog!

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