If you have struggled with credit card debt in the past, you may have used a balance transfer card to reduce your interest.
If you were considering getting a new balance transfer card to help with current debts, you might be out of luck. The Wall Street Journal found that credit card companies are tightening their issuing policies. With many people facing uncertain financial futures, lenders are cautious; not only are they declining many card applications, but they are also cutting some cardholders’ credit limits.
So, if you are struggling with credit card debt, what options do you still have?
- Consolidate your debts with a personal loan: Moving your debt from your cards can result in a lower interest rate. Having one large balance, rather than various smaller balances, lets you see the total you owe more clearly. It can help you face up to your financial reality and halt unnecessary spending.
- Use other monies to pay your debt: Have you used your stimulus payment to reduce your debt? Do you have a holiday fund that you keep in a separate bank account? Do you have funds you were saving for your child’s education? As sacred as some of these savings may seem, if you are struggling financially, using them now may pay off in the long term.
There is one more option, which you might not have considered: bankruptcy. A Chapter 7 bankruptcy could free you from the burden of credit card debt. It comes with specific requirements and certain drawbacks that a bankruptcy attorney can help you to understand.