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The past few years have been tough for many lenders. In fact, many weaker banks, investment firms and credit card companies have gone belly-up since the financial crisis of the late 2000s.
Those that remain are looking for any excuse to pad their bottom lines. Unfortunately, that often means that they'll raise their clients' rates at the slightest provocation. Whether your rate shot up because you missed a payment, exceeded your spending limit, or suffered an unrelated setback to your credit score, you may be stuck paying higher interest rates for years to come.
If your interest rate increased because of a sudden decline in your credit rating, you won't be able to repair the damage overnight. However, there are a few steps that you can take to offset your poor credit score.
First, avoid missing any more payments. This is easier said than done: When you're spending nearly all of your after-tax income on household necessities or debt payments, you're bound to face some tough choices at some point. However, it's absolutely essential. When they calculate your credit score, all three major credit reporting agencies give tremendous weight to your ability to make your payments on time.
Next, begin de-leveraging. In the long run, carrying excessive credit balances may hurt your credit score even more than missing an occasional payment. If a sudden drop in income or life-changing event does force you to use more credit, don't charge all of your new expenses on the same card. Spiking balances are a major red flag for credit reporting agencies. Instead, apply for an entirely new line of credit. At the same time, start devoting more of your disposable income to paying down your existing balances.
Even as you take these prudent steps to improve your credit score, you'll need to begin reducing the size of your debts. If you're like most borrowers, you simply can't afford to pay 19 percent interest on credit card balances of any size.
First, stop using the offending credit card and switch to cash or debit. If you must continue to charge certain purchases, use a less-expensive card. Don't make any new credit requests unless they're absolutely necessary.
Next, do everything that you can to pay down your balance in short order. To avoid delinquency, you must continue to make the minimum payments on your other cards. The rest of your income after accounting for taxes and household necessities should go towards taking care of your problem card. Depending on the size of your balance and the card issuer's willingness to refrain from further rate increases, you may begin making headway in short order.
Unfortunately, you may not be able to climb this debt mountain on your own. If you feel like you've tried everything and still find yourself paying an exorbitant interest rate on a balance that won't seem to shrink, don't panic. Debt settlement may be the answer to your problems.
Debt settlement is relatively affordable and highly effective. Unlike bankruptcy, which may affect everything from your credit score to your job prospects for a decade or more, debt settlement enables you to begin rebuilding your credit as soon as you've wrapped up the process.
Unlike some other debt relief options, it's also brutally effective at reducing the actual amount that you owe your creditors. With debt settlement, you'll be able to say goodbye to your 19 percent interest rate as well as a significant portion of your card's outstanding balance.
Call or fill out the no-obligation form today to learn more about debt settlement and start looking forward to a debt-free future.