Living the type of life you would like to be living is difficult when you have a lot of debt. Debt payments may be taking up a significant portion of your income. This leaves little money for savings, discretionary spending and retirement planning. What are some ways you can stop drowning in credit card debt? Getting relief from your credit card debt may be easier than you think.
Stop Creating New Debt
Your problem is not going to be resolved if you keep using your Visa, MasterCard and American Express credit cards. Do whatever it takes to stop using your credit card. Chopping up your card into little pieces will be an easy way to avoid the temptation of charging your purchases.
Stop shopping online. Internet shopping is where you are going to be tempted to use your card the most. Force yourself to use your debit card if you have to buy anything from an online retailer. Paying cash is an even better idea because it forces you to make purchases offline. Impulse buying is a lot harder to do when you actually have to spend the time going to the store.
Spending too much money is likely what got you into your debt problem in the first place. Continuing to spend beyond your means will be a sure way to send yourself right to bankruptcy court. One idea is to start making a budget to give you a visual picture of how much you can spend each month.
Which Bills Should Be Paid Off First?
You have many options when it comes to obtaining credit card debt relief. The first option is to create a strategy that targets the credit card which carries the lowest balance. This is often referred to as the snowball strategy. Another strategy is to pay off the card that carries the highest interest rate. Taking this route is called the avalanche method.
For example, say you are carrying a balance on three different credit cards. Credit card A has a balance of $14,000 with an interest rate of 18 percent, credit card B has a balance of $16,000 with an interest rate of 25 percent, and credit card C has a balance of $5,000 with an interest rate of 13 percent. The snowball strategy would have you start allocating more money to credit card C each month.
The avalanche theory would have you allocate more money to credit card B because it carries the highest interest rate. Remember that you should allocate more money to a particular card only after making the minimum payment to each balance. Therefore, you need to make sure you can pay more than the minimum on at least one balance each month.
Other Debt Relief Options
You have three other options if you cannot afford to pay more than the minimum each month. The first option is to consolidate your debts on your own. Balance transfers, home equity loans and unsecured consolidation loans can lower your monthly debt payment. However, these options are only available to debtors who have maintained a good credit score.
When you are drowning in credit card debt, your next option is to offer your creditors a debt settlement. Your balance may be slashed by up to 50 percent. However, this amount depends on your creditor. Some will only lower your balance by 25 percent. Others will only concede any late payments as a form of debt relief.
The final option is to employ a third-party debt relief service. Your debts will be consolidated in a manner that is agreeable to both you and your creditors.
Another benefit to using a debt relief service is that your creditors or debt collection agencies will no longer be able to contact you. Having creditors off your back will make you less likely to turn to bankruptcy. This is because you will no longer feel the stress of constant creditor harassment.
Credit card debt doesn’t need to ruin your life. You have plenty of options to deal with what may feel like an unmanageable debt. Consolidation, professional debt relief services and debt settlements are all ways to lower your monthly debt payment. Just keep in mind that you should not be creating new debt while dealing with old debt. Finally being able to enjoy a life free from debt will be well worth your sacrifice. Call us today to speak to a representative to stop drowning in credit card debt. Take 30 seconds to fill out the form and see how much you can save with no obligation.