How to Eliminate Credit Card Debt
Eliminate Credit Card Debt - If you have credit card debt, you are not alone; this is a phrase that you have likely heard time and time again. We all know that credit card debt is a major problem throughout the country and that many people are sharing the same boat, but the feeling of being lost and alone still lingers. The question on everyone’s lips are how credit card debt can be eliminated or to eliminate credit card debt for the last time! As soon as you take on a credit card, the risk of debt makes some people have restless nights – with the high interest rates it is no wonder.
Minimum payments seem to make the problem worse and the ultimate step on how to eliminate credit card debt gets further away rather than closer. Truth is – getting out of debt is difficult, but the least you can do is weigh up the options of paying it off and make a wise decision. View the possibilities below, make a choice (the right one!) and stick with it.
Eliminate Credit Card Debt
It is nearly impossible to function in society today without a credit card. Since they are so common and easy to use, it is easy to get carried away and find yourself buried under a mountain of debt that looks hopeless to ever get rid of. However, with a good plan and perseverance, you can improve your financial situation. Here are five steps to eliminate credit card debt.
1.) Stop Adding More Debt
The first step to eliminating your credit card debt is to stop adding new debt. This may be difficult at first if you are used to living on credit cards. But as long as you keep using your cards. You’ll never get them paid off. Make a commitment to yourself to use cards for emergency purposes only. Hold off on buying new clothes or household items you don’t really need if you can’t pay cash for them.
2.) Come Up With A Plan
A well planned budget is like a roadmap that will lead you out of debt. Creating a budget forces you to take a hard and honest look at your finances. You may be surprised to find out you spend more each month than you make. Figure out where you can cut costs and come up with a workable plan to eliminate credit card debt. You may have to cancel your cable or stop eating out. Just remember, it is for the short term so you can get your finances under control.
3.) Pay For Everything With Cash
Get out of the habit of using your credit card for everything from buying an afternoon gourmet coffee to making spur of the moment purchases. Leave your credit cards at home and carry a small amount of cash instead. This will help you stay on budget and help you to realize how much money you are tempted to spend unnecessarily. You can even buy prepaid debit cards to use if you prefer the convenience of being able to pay by card. With a prepaid card, you won’t have to worry about piling up new debt.
4.) Lower Your Interest Rates
Take a look at your credit card balances and interest rates for each. You can reduce the amount of money you have to pay out each month on credit card payments if you can lower the interest rate on your balances. You can call each individual credit card provider and see if they will lower your rates. Offer to consolidate all of your balances onto their card if you can get the lowest rate. When you combine all of your balances onto one card, and lower the rate, this will give your monthly budget more wiggle room so you can stick to it easier.
5.) Make Extra Payments
Another way to reduce the amount of money you throw away on interest is to make more than the minimum payment each month. Rather than making extra payments on several cards, focus on the one with the lowest balance or the one with the highest interest rate. Make extra payments so you can get it paid off quickly. Then apply the amount you were paying on it to another card so it can get paid down quickly. This plan can help you eliminate credit card debt while keeping your total payment amounts constant, but you will save a lot on interest and get your cards paid off faster too.
Eliminate credit card debt
Eliminate credit card debt takes commitment to your goal. If you are used to buying whatever you want, then you will have to make adjustments to your lifestyle. Just remember, it isn’t permanent, and living frugally now will pay off in the long run. While making a budget is important to getting your debt in control, don’t be too strict with it, or you may not stick to it for long. Include room in your budget for an occasional fun night out on the town. To Eliminate Credit Card Debt is just one step you need to take to achieve financial success. You’ll also need to learn how to save and spend your money so you don’t wind up buried in credit card debt again.
Have you heard of the credit card debt relief program? There has been a lot of talk about it – with both positive and negative reactions from the people. The basics are this – if you have more than $10,000 in unsecured debts, you can get this amount erased. It sounds promising and success stories have been confirmed. It depends on which credit card company you are with, but for unsecured debts over $10, 000 you can expect between 50-60% of it to be erased and there are companies, which help to make you understand this better and to put in your own claim.
Debt consolidation is when you take out a further line of finance in order to eliminate your credit card debt. In most cases, the general idea is to take out a loan that will pay off all of your credit cards and other debts – leaving you with one monthly payment and only ‘one’ debt. This is a plus if you can get a loan with lower interest rates as those you have with current credit cards, etc. and hence, your monthly payment should be lower than it is at present. One of the downsides is that you may need to lengthen the time in which you intend to pay it back, resulting in a longer term of paying interest. It certainly helps to simplify your situation, and it will help to make you feel more in control of your finances with one monthly payment; not to mention that you will probably get lower interest rates.
So far, it sounds quite promising, but there are of course cons to eliminate credit card debts this way. One of the cons that is troubling is the fact that a loan will often be secured on your home – in other words, an unsecured debt is switched into a secured one. Why is this so troubling? The risk of foreclosure should you run into more difficulties further down the line. Short term it may make your life seem rosier – but if you have been struggling to make payments it won’t ultimately erase this issue, unless you pay more attention to your incomings and outgoings – budgeting and being sensible with your personal finances.
With debt elimination, you really have to be weary and not to fall into a trap – there have been many reported scams that are doing the rounds. Unfortunately, telling the difference between honest debt elimination and a scam is more difficult than most would expect. You have seen the advertisements of some and laughed out loud – yes. You can sniff out a scam like the best of them.
It isn’t those outlandish advertisements that you should be worrying about though – it is the ones that have made their representation so close to the genuine means of debt consolidation that it is very hard to differentiate between the good guys and the bad. Any business that claims to be a debt relief specialist and who only accepts payment in cash or money orders are potentially, if not indefinitely, a scam.
Is eliminating credit card debt legally the information that you require – we should hope so! How is this done exactly? First, if you have a ‘collection’ of credit cards then you must seek out a way in which to get this mass of cards back down to one and there are ways in which you can put all outstanding credit card debts onto one card.
Perhaps an obvious statement, but another method that will help to eliminate your credit card debts is to spend some time reviewing your personal finances, budgeting in the hope that you can afford to save something after your general living expenses. Furthermore, do what you can to increase your income, whether it means further training or a new career. Perhaps you could use some of your free time to take up another part-time job for a while – it might seem like a lot of effort, but you will be rewarded greatly.
You should also try to negotiate with your creditors, perhaps requesting that the repayment period is increased, and monthly payments become more manageable. You should also try your luck at having interest rates reduced. For further advice, you may wish to seek out credit counseling. They can help you learn how to manage your debts more successfully as well as the steps in which to eliminate credit card debt.
Before you consider bankruptcy, it is a better idea to look to your fixed assets and whether it would be a good idea to sell them before being tagged as a defaulter for life. Fixed assets can always be bought again, but the status of bankruptcy will hinder your future. I hope you find the above tips useful on how to eliminate credit card debt.