A common question that is asked among the credit card community is, “What happens if you don’t pay your credit card bills?”  While it’s a good question, you have to understand that each credit card community works in different ways.

I wanted to point out a few scenarios that you may face, when you haven’t paid your credit card bills in quite some time.

Your debt gets sold: After a few months to a year, you’re going to soon find out that the credit card companies are soon going to just give up on you.  What they will do is just sell your debt to third party services for pennies on the dollar.  This is when the phone calls are going to start coming in, and there’s no way around it.  It’s always in your best interest to pay off your bills.  These calls will continue until you pay off the debt, or declare bankruptcy.

Show up in court: Many card companies today will summon you to court.  It’s absolutely essential that you show up! If you don’t show up, you’re going to be in for a world of hurt, because this will allow the courts to do just about anything to you.  You’re going to find that you will most likely get your wages garnished, etc.  Show up in court, explain your situation, and work something out.

Your credit goes bad: This is the obvious one, but many people don’t realize how harmful this is.  In today’s world, employers check credit, banks check credit, and so does everyone else.  What you’re going to find out is that if you have bad credit, you’re going to risk getting a job, getting a car loan, mortgage, and everything else.

Lots of fees: If you do plan on paying your card off in the long run, you’re going to run into a lot of fees.  Everything from a late fee, to over the limit fee.  You’re going to get hurt so bad with interest rates as well, you will never know if you’re going to get the balance paid off.

What can I do about this?

The first thing that you can do is always show up to the court cases.  You will want to make sure that you can tell the judge what’s going on, and explain your situation.  By doing so, you’re going to find that the judge will side with you and have the debt collection agency work something out with you.

The next thing that I would recommend is that you haggle with the credit companies.  Try and get some money and work out a lump sum payment.  Many people don’t know this, but you can say settle a $5,000 debt for $2,500.

In the long haul, work hard at paying your debts off.  By doing so, you’re going to feel a lot better, and you’re going to find that you won’t get those harassing letters, or phone calls.

When you think of the word, “excessive”, everyone’s answer is going to be different, in terms of the money amount.  In my opinion, anything over $25,000 is excessive, but the guy next to you may say, “$10,000.”

Regardless, if you’re in the boat of excessive debt, it’s hard not to stress out, and I don’t blame you one bit, but if you’re not doing anything about it, it’s time to do something right now!

Let me give you 6 pointers that you can use, when you’re looking to solve your excessive debt problems.

#1 Money = Debt

We all know that there’s no magic button out there that you can press, and your debt is magically gone.  Unless you win the lottery, you’re going to have to pay off those debts by yourself.  In the past, I have wrote some great articles talking about side job ideas, as well tips for retiring early.  Find side jobs, sell junk, and apply as much money as possible toward your debts.

#2 Organize your bills

You don’t have to hire a firm to get your act together.  Instead, you can do all of this on your own.  Instead of going out, hiring someone, and having them charge an arm and leg, you’ll want to start to organize your bills yourself.  Gather up each bill, write out the interest rate, as well as the balance.  Put the highest interest rate balance on the top, and go from there.

#3 Attack the top bill

Once you organize your bills, you’re going to want to attack the top bill.  By doing so, you’re going to get rid of the highest interest rate balance.  You don’t want to give the banks anymore money than you have to.  By minimizing the bills with high interest rates, you’re going to be able to apply more money toward your principal.

#4 Always pay the minimum

You will always want to pay the minimums on all of your cards and never miss out on a payment.  By doing this, you’re going to save your credit score.  This is crucial if you plan on getting a home, car, or anything loan related in the future.

#5 Haggle with the credit card companies

Many people don’t know this, but you can negotiate with the credit card companies.  If you’re going to take this route, you’re going to want to have a lump sum of money to send the credit card companies way.  For example, if you had a $3,000 balance, you may be able to settle for $1,200.  The companies will want something, rather than nothing.

#6 Work hard and don’t give up

Nothing is better than getting out of debt, and once someone gets out of the hole, they never go back again.  Have a carrot at the end of the stick, and give yourself motivation.  Whether it be a vacation, a fancy dinner, or early retirement, you want to wake up each morning to work hard and kill your debts.

Try these tips and stay strong.  By doing so, let’s hope that you can attack your debt the right way.  Be sure to share your debt stories in the comment below and let us know how you did it!

Having a credit card means responsibility and whether you have a debit card that’s tied into your bank account, or maybe you have a credit card that you use for rewards, or other things.  It’s important to be safe with your credit card.  By doing so, you’re going to find that you’re going to prevent a lot of stress, and headaches in the future.

While most credit card companies are going to protect you from fraud and stolen cards, it’s essential that you keep an eye on your card anyways.

#1 Monitor your account

Every major card company today allows you to monitor your statement online.  I would recommend that you set up an account online.  By doing so, you can log in every few days just to monitor your access to ensure that all the charges on the card are being done by you.

#2 Use credit cards online

When making a purchase online, I would make it a habit to use your credit card.  What you can find is that many credit card companies will allow you to create a virtual number.  This is great for those that are looking to use a one time card number.  This way, if the number gets stolen, the crook can’t do anything with it.

#3 Know where your card is

Make it a habit to keep your card in your wallet, or somewhere safe in your home.  You’ll want to know where your card is at all times.  If you’re going to get keep it at home, make sure you place it in a safe.  This way, you don’t have to worry about people stealing it, if you have strangers coming into your home.

#4 Never give out your number

Never give out your account number over the phone, unless you know who you’re talking to.  Again, if you have to, I would recommend that you get a virtual card number.  By doing so, you’re going to find that again, if something does happen, the crooks won’t get that far.

#5 Consider a photo ID

I don’t know why all credit card companies don’t do this, but I would recommend that you get a card that has a photo ID.  Just like your driver’s license, the credit card companies can match up the picture to your face.

To get even more tips, visit Citi Bank’s credit card safety tips page, as well as Consumer Report’s safety page.  It’s important that you watch your card, because trust me, you don’t want to be on the phone for days to figure out how you’re going to fix your credit and identity.

When you get your credit card statement and you haven’t paid the bill in full, you’re going to find those awful finance charges.  They can range anywhere from 0% all the way up to as much as 79%.  I’m not lying on that one!  Every credit card is going to vary and the rate will all come down to you, and your card.

When you’re looking to figure out your finance charges, it really isn’t hard to do.  You can either do it on paper, or if you wish, you can use online finance charge calculators that do the dirty work for you.

To do it on paper, here’s what you have to do, in order to figure out your finance charges on your credit card statement, or any other credit that’s going to charge something such as this.

Before we start, let’s take a look at how a basic loan works.  You’re going to have your principal, which is the amount of money that you are going to borrow, and you’re going to have your interest.  As we all know, this is the money charged in order for the lenders / banks to make money.

When you’re ready to start your formula, you’re going to need to following to figure out your finance charges.

• Your principal = The amount of money that you have borrowed.
• Interest rate = What are you being charged in terms of interest?  This should be right on your bill / statement.
• Length = If you have a “timed” loan such as a car payment, etc, you will want to mark this down as well.

Finance Charges = Principal x Interest Rate x Length of the Loan

Since the interest rate has to be in the forms of a decimal point, you will want to divide it by 100.  For example, if you have a 20% interest rate, your number will be 20/100 = .20.

Next, you will want to take the length of the loan and multiply it by 12, if you’re paying monthly, or 52, if you’re paying weekly.

Let’s take a look at an example:

Let’s say that you go out and purchase a boat.  You take out a loan of $5,500 at a 10% interest rate, and it has to be paid back over 5 years monthly.

Let’s take the principal ($5,500) x 0.10 x 5

We get $2,750

Now, we can see how much we’re going to owe as a total.

$5,500 (principal) + $2,750 = $8,250

As you can see, it’s fairly easy to figure out the formula, and it also opens you eyes up to how much interest rates can eat away at your bill.  This is why I always recommend that you pay off a bill as early as possible!  By doing so, you can avoid a lot of interest rate charges.

Being in debt sucks, I know and obviously, the only solution to get rid of debt is to make money.  If you’re looking to make money quickly, there are a few steps that you can take in order to make money right now.  Remember, money will always take work and as long as you put in effort, you can generate as much income as you want.

The temp agency: Remember, it’s going to take work and there’s no magic button that you can press to instantly put $100 in your hand.  Look up a temporary agency to see what kind of work that they can give you.  You can make money as quick as tomorrow.

Part time job: Places like SnagaJob are amazing when it comes down to finding hourly jobs only.  Part time jobs are generally easier to find and if you don’t mind making $8-10 a hour for 20 hours a week, start a search, and you can have a paycheck in 2-3 weeks.

Hit up eBay: You’re on the Internet right now (unless you printed this out).  Grab a ton of items around your house and start selling today.  You will be amazed at what you can get for particular items!  Find 50 items, get $3 for each one, and you just made $150.  Don’t like eBay?  Try out Craigslist and see how much you can make on there as well.

Try out paid surveys: Now, you’re not going to make a killing doing this, but what you can find out is that if you refer enough people, fill out your profile the right way, and actually complete the studies that you can make $100+ a month.  You won’t get rich, but you can honestly make a few bucks ! Check out the link I listed for the top 10 legitimate sites that pay.

Browse Craigslist: This is kind of like the temporary agency type gig, but instead of going to a shop, you can control the jobs yourself.  Look in the “odd jobs’ section on Craigslist and see what kind of jobs that are out there.  These will most likely be 1 and done type things, but you can make some pretty good money depending on the job.

Try out MTURK: Amazon’s MTURK is a great way to make money right now.  You can hop online, look at the online jobs, and see which ones fit your needs.  From doing entry level work, to judging something, you can make as much as you want.

Hold a Garage Sale: If the weather is right, throw your stuff on the curb and sell it.  While eBay may be great, if you have a lot of junk, it may be easier for you to sell it at home.  Make sure that you advertise your sale in the local paper, as well as free classifieds as Craigslist.

Give blood: You may not like the idea, but find a local clinic that will pay you for your blood and/or plasma.  You can do this a few times a month, but each clinic will vary.  It’s a quick way to make a few dollars.

Hit the beach: This one is silly but it can work.  Hit up the beach, grab a metal detector and find some gold, or jewelry.  You’ll honestly be amazed at what you can find out there!

As you can see, money will always take some work and effort.  Without the effort and money coming in, you’re soon going to find out that it’s going to be hard to pay off that debt.  Use some of these ideas and see how much debt that you can kill.