I can image that feeling you had when you got your first credit card, it was great wasn’t it. It meant not only having to carry less cash around but also meant that you had the liberty to charge any amount up to your credit limit and keep spending until your credit limit hits. Its all good fun until you realize that at the end of the month you have to settle your debts or pay the minimum amounts. You realize that you have spent too much and pay the minimum amount required to buy you some time to save up some money. The unfortunate thing is that you don’t end up saving the next month and the previous month’s balance is still outstanding along with whatever amount that you might have racked up this month. I’m sure you can see where I’m going with this. This is what we in the industry call the credit spiral from hell.

The problems are always made apparent at the end of the month when you realize that you have spent too much and can’t pay the balance, so you end up paying the bare minimum and push the problem to the next month. This goes on month after month until you have spent up to the credit limit of your credit card but with no ability to pay it back. The interest will constantly keep rolling and rolling to a higher amount while you brush off the problem and go apply for another credit card so you can get a fresh credit limit. As absurd as it may sound to you right now this is exactly what goes through the head of most credit card users. The average American has 9 credit cards to his / her name with an average balance of $9000 which they will need to pay off. Remember that this is just an average and there are many thousands of people who have many more cards and balances much higher.

The sun still continues to shine on your new lifestyle until the credit card companies start their regiment of calls and letters to get you to pay your bad credit card debt. This is where it really starts to go downhill. Some lenders will pursue the debt themselves while others will simply sell their debt to collection agencies. This is where it gets interesting, collection agencies aren’t know to be very diplomatic about getting their money back and some will even have “collection agents” look you up and give you a nice “talk” about paying back what you owe,

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