How to Pay Off Bills With Bad Credit

Paying off debt is a difficult task for everyone these days. Gas prices keep rising. Groceries are costing us more. In fact, just about every bill that consumers have is rising to new levels of "ouch." How is someone supposed to pay off their bills with bad credit attached to their name? No lender wants to extend any more credit to them. The interest charges on existing debts, especially credit cards, keep going higher and higher. And there is no end in sight. Fortunately, a few simple strategies, painful as they might be, can readily help someone pay off their bills and crawl up out of bad credit once and for all.

Instructions

1

If you need to pay off bills with bad credit attached to your credit history, don't be fooled into thinking that you can't do it. You can. However, you need to realize that it didn't take one day to get into this mess and it isn't going to take only one day to get out of it. The first step is to stop making any purchases unless they are necessary for survival. All pleasure purchases need to stop for the time being. Yes, it will be difficult, but it isn't going to last forever. Take a pair of scissors and cut up any credit cards that you don't use for necessary purchases.

2

Next, always pay your existing bills on time to avoid late fees. The average late fee ranges between 25 and 35 dollars. In some cases, this amount can be larger than the minimum payment due. If any of your credit cards have a universal default clause on them, paying a bill late can lead to higher interest rates on each of your accounts, including installment loans and credit cards.

3

If possible, pay slightly more than the minimum amount due on any of your bills. Start with the smallest credit card bill and see if you can pay it off fully. This will free up a bit of cash that you will be able to apply toward another debt. Take a pair of scissors and cut up each card as you pay it off. Call up and cancel the card completely so that you aren't tempted to use it again.

4

To get a bit more cash to place on your bills, gather up any items that you have at home but no longer need. Use the Internet to locate local places to sell these items, including websites geared toward your area. One example is a "Links and Exchanges" group that allows members to advertise items that they have to sell free of charge. This particular group is one of the many offered through Yahoo. Plus, these types of groups do not charge any fees to join or advertise.

5

Begin a strategy to decrease your spending each week, even if it is just a few dollars here and there. Stop eating out or picking up a cup of coffee on the way to work. Cut back on your phone services. Eliminate your secondary phone, at least until you get your bills paid off. Start buying no frills-brands. Avoid buying snack foods since they usually cost more and provide less nutrition. Use the savings to pay down your bills.

6

If you have children, ask the kids to become responsible for their own purchases. This will save you a lot of money and provide them with some new skills. They can get a job babysitting, doing chores for a neighbor, or getting a paper route.

7

Check with local lenders and banks to see if you can consolidate your debt and bills into one loan. This type of loan is usually referred to as a debt consolidation loan. Even if the interest rate is higher than some of the interest rates that you are currently paying, the minimum payment due is likely to be much less than the sum total of all of the minimum payments for your current bills.

8

Once you have paid off your debts and bills, you can arrange to speak with a representative at your personal or local bank to discuss the acquisition of a new credit card. Start slowly and use the credit card mainly to make necessary purchases.