More and more Canadians are finding themselves in a bad financial picture because they have fallen behind on their credit card payments.  Although the natural response may be to bury your head in the sand and pretend the debts don’t exist, you can’t do that for long.  Here is what you can do if you fall behind on credit card payments:

  1. Don’t panic! Take the time to breathe.
  1. Contact the credit card companies you have arrearages with, whether you are a little behind or way behind on payments. Make a list of all your accounts and ensure you call everyone.
  1. Explain to them what is going on and ask them how they can help you. If you have already figured out an amount you can pay monthly, now is the time to communicate that. Many companies will assist you in a number of ways to encourage monthly payments. Credit card companies and banks alike are willing to work with customers to keep them. These can be everything from removing a number of late fees and penalties, offering a repayment plan or even lowering your interest rate on the account.
  1. Let the consequences be motivation to payoff credit card balances. When it comes to paying off credit card debt, use the vision of a positive credit history and better credit score in your future to get it done now.
  1. Make a plan to get your credit cards paid off with the money you currently have coming in. Creating a budget if you do not already have one is critical to your financial health and the ability to catch up on the credit card accounts. Now is the time to scrimp and save.
  1. Earn additional money to use towards paying down credit card debt. You can pick up a second job, start a home business or freelance services in your town or online to earn extra cash. When this money comes in, use it for nothing other than paying down the credit cards you have fallen so far behind on paying.
  1. Don’t let the debt overwhelm you. Even though the numbers may seem monumental or impossible, they are not as scary as you think. When faced with massive debt, a lot of people want to feel sorry for themselves or spend their time depressed and focusing on everything they don’t have that everyone else does. Snap out of it and focus instead on your future.
  1. Stop making compulsive purchases to make yourself feel happy. It’s natural in this culture to blow extra money instead of putting it where it needs to be–towards debts or savings. However, don’t fall into this trap anymore. You don’t need to splurge or indulge yourself for true happiness. Take the extra money and put it towards the debts you have already committed to pay off in order to get the real personal finance happiness you are seeking.
  1. Envision your financial goals. This is where the happy comes in to play. When you get that picture in your head of the house you want to buy one day or of the business you want to build, your efforts seem much more doable.
  1. Pay off the debt you incur, even if the account is in collections. Rather than ignoring the debt that has gone into collections, pay it off instead. A great deal of collection agencies will work with debtors and even offer payment arrangements. The newest credit scoring models have been developed to show a near instant impact on credit scores when someone pays a debt off in full.
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