Recession-proof your credit

Picture it: You're so dreading (or behind) on making your next credit card payment that the mere mention of anything related to money makes you want to hunker down on the couch, watch Bridget Jones Diary and lose yourself in a bowl of raw brownie batter. "Call me when I've won the lotto," you think, a helpless look in your eye and a glob of brownie batter on your chin. Who knew it would come to this? Just breathe. It will be okay.

There are two pros to this situation: 1.) Your form of escape (albeit just as caloric) doesn't involve four cocktails and subsequent sobbing through an awkward drunk dial to an ex about how your life is so screwed up, and b.) Now is the perfect opportunity to reevaluate how you got into this mess and take steps so that you won't fall even more behind.

Instead of letting the recession get you down, take charge and get yourself under financial control. Dig yourself out of the ditch, so to speak. For most people in financial distress and falling behind on credit card payments, the natural response is avoidance. (Hello late night Bridget Jones marathons.) But putting it off until later won’t make it go away. Instead, the long-term effects are stress and damage to your credit history.

If you are having difficulty making your monthly credit card payments, address it right away – before you miss payments and your account is reported as past due to the credit bureau reporting agencies. Once your account is reported, it could negatively impact your credit rating, which may then affect your ability to get additional credit in the future. Citi Cards offers some fantastic tips on how to get your payments back on track:

Talk it out. Financial troubles can happen to anyone, so don’t be embarrassed to explain your situation – honestly and immediately – with your credit card company. The sooner you talk to them, the better they’ll be able to help you get your finances under control. From what I've heard from friends and other bloggers, credit card companies are more than happy to work with you on payments, rather than receiving no money or explanation from your side, which leads me to the next tip ...

Work it out. Most credit card issuers want to work with you to come up with a payment plan to keep your account current. Many people experience tough times, but no two situations are exactly alike, so work with your card issuer to see what temporary payment options may be available to you, such as:

• Lower monthly payments
• Reduced interest rate
• Waived late fees and over limit charges
  

Keep track of your account -- automatically. Once you’ve set up a payment plan, help stick to it by signing up for free online tools offered with your credit card. For example, automatic alerts notify you via e-mail or text message about important account activity such as due dates, current balance or payment notifications. Additionally, some issuers offer customers an "auto pay" feature ensuring that you’ll never miss a payment.

Stay the course. Once your payments and account are back on track, resolve to use credit wisely. Easier said than done, I know. But next time you're fantasizing about a new pair of Stuart Weitzman heels, take into account of whether you have the cash, and not the credit, to back up such a purchase, and where that purchase falls within your list of priorities. Do groceries or plane tickets to visit family over an upcoming holiday come before shoes in your life? Be honest with yourself and evaluate your impulse.