Debt is something that so many of us have. It is something that we increase every month. To eliminate credit card debt is something that is also very hard to deal with. You see a way out of great debt by paying the minimum payment, but that is not getting the principal gone.
There are some valid reasons for having high interest debts. You may have needed to fix a car, make a large purchase, gotten sick, or even lost your job. All of these can cause us to increase our debt; however, we should be looking to relieve ourselves of our debt. There are several things that you can do to help eliminate credit card debt.
Talk to Your Creditor
When you are eliminating credit card debt, it can be valuable to talk to your creditor directly. Many times your creditor is able to work with you. They may be able to reduce your payments, or decrease your interest rates. Even getting a percentage or two taken off the interest rate can save you hundreds of dollars.
Where to Focus
It can sometimes be a balancing act between which debts to pay and which to let slide. It is important to make a list of each debt that you have. Create a list that has the balance due, the interest rates, minimum payments, and anything else you think can help you sort out you’re your debts. Offer yourself a bonus when you finish eliminating credit card debt for one creditor. It is easier to see the end of a single debt rather than the goal of eliminating everything. Remember that you need to continue to pay on all your debts, however focus any extra money or payments on a single debt.
Double it Up
Credit cards usually charge interest according to the daily balance. This is important because to eliminate credit card debt you need to reduce your daily balance as fast as you can. It may seem hard when someone tells you to make a double payment. If you are on a tight budget then you should make your minimum required payment no matter what. Then two weeks later send in a second payment that is the same as you minimum monthly payment. When you sit down and convert the amount you owe to how many month you will need to pay you will see the difference. By adding an extra payment, you are reducing your daily average that will equate to less dollars paid in interest and less time that you will be paying on your debt.
It can be complicated when for person to transfer their balance from one card to the other. It may not seem so but it can be tricky. Transferring a balance due from a high interest credit card to a low interest credit card can potentially save you hundreds of dollars a year. There is a minor catch though. When you do this, you usually will receive an introductory low interest rate window. This needs to be strictly adhered to, be sure before transferring the money you can have it paid off by the end of the introductory period. If you are late with a payment or have a balance at the end of the intro period, your rates will bounce sky high. You could end up with a higher interest rate than the creditor that you recently transferred from. It is important to determine if you will be charged a balance-transfer fee, make sure that transferring the balance is the right thing for you when eliminating credit card debt.
Peer to Peer Lending
It is not always in everyone’s best interest to pay off your credit card in full. However, when an individual cannot pay them off you can turn to a peer-to-peer lending company to help eliminate credit card debt. There are secure sites that offer loans that have fixed rates that can be much lower than those of the original debt can. By have the lower rates you can again save hundreds of dollars as well as paying off the entire original debt.
There are many different forms of debt management like debt consolidation, debt settlement, and bankruptcy. Each of these different types of debt management that can help you to eliminate credit card debt. Bankruptcy is one that most people shy away from because of all the negative rumors. You are able to eliminate all unsecured debt; however, there are many negatives to bankruptcy as well. A second option is debt settlement, which is when an individual contacts the creditor to make a lump sum payment. Sometimes this is easy to be done, however others it can take time and you may even want to get help. Debt consolidation is another option; this is where all of your debts are combined into one. This allows you to make a single monthly and still reduce all your debts.