Significance

• Credit card debt is used in many ways in today's society to judge someone. Almost anyone that makes a large purchase, especially if they are seeking to finance the purchase, will have their credit card debt reviewed by the seller. Sellers are not the only ones that pull your credit card and debt records. Many employers also use credit reports as a way to screen prospective employees. Employers and retailers alike judge your financial reliability in part on your credit record.
  
  

Types

• Dealing with credit card debt largely depends on the type of credit card debt you have. If you have not had your credit card go into collections, but you are having trouble making payments, it is advisable to contact your credit card company and explain the situation. If you are a good customer in good standing, they are likely to give you extra time to pay the amount you owe. The credit card company will usually ask you to make a payment of some amount of your payment due, but will not require the entire payment that is owed to be paid.
  If your credit card has gone into collections, dealing with credit card debt is a little more difficult. In that situation, you will most likely have to make arrangements for periodic automatic payments to clear your credit card debt if you can not pay it off immediately. This is a contractual agreement between yourself and the credit card company.
  
  

Features

• There are many different options companies might offer you for dealing with your credit card debt. Some will offer to lower your interest rate as long as you are willing to sign up for automatically scheduled payments through your checking account. Other companies might agree to reduce your monthly minimum payment if you make the same agreement with them. In extreme situations, a credit card company might decide to "write off" your debt and not try to collect it, but this will go on your credit record as a negative mark.
  
  

Effects

• Carrying large amounts of credit card debt can be detrimental to your ability to obtain a mortgage, rent a home, purchase a car, or rent a car. Paying off a large amount on your credit cards can be more beneficial than leaving that money in the bank for financial security in the case of an emergency. Paying the minimum amount on your credit card debt each month may only meet the interest portion of your account and do nothing toward paying off the principle. Using your savings to reduce your debt might improve your chances of getting a job which pays well, but requires a credit check.
  
  

Warning

• Be very careful when dealing with companies that offer to make your credit card debt disappear without requiring you to pay your bills. These companies do not have your best interest in mind. Many of them are just seeking money for their consulting fees, and working with them will leave you with more debt. Others will offer solutions for how to pay off your debt, but fail to mention the negative results their options will leave on your credit report.