Compare Low Rates from Top Lenders

4 Ways to Eliminate Credit Card Debt

Are you looking for three simple ways to get rid of credit card debt? The first one is obvious: Stop using your credit cards. Don’t think of the cards as money anymore. Take them out of your wallet except for one you’ll use in an emergency. Many big life improvements start with a basic but monumental mental adjustment.

Second, consider consolidating your credit card debt onto one card with a lower interest rate. Some folks make it a routine to transfer their credit card balances to the next new 0% card. It is time consuming but can save significant money. Of course, to make this system work, you need to destroy those high-interest cards. Don't fool yourself into keeping them “just in case.” Eliminate the temptation of using them again so that you don't dig yourself another hole.

Third, start making double payments. Most credit card companies rig the minimum payment amount to keep you paying forever, requiring just enough money to cover their interest charges but not move the needle on the principal. Outsmart them by paying more than the minimum, and stop using the card, and you’ll finally see your balance reduce.

Lastly, you can take out a low-interest home equity loan or home equity line of credit (HELOC) to pay off all the credit card debt. Then you’ll have only one payment. In all likelihood, it will be a much more manageable payment and easy to keep current.

Use a HELOC for Credit Card Debt Consolidation

Fighting high credit card debt can be stressful and seem almost impossible. Many homeowners eliminate their credit card debt by taking advantage of the equity built up in their home and today’s very low interest rates. With a home equity line of credit, you can get a loan with a low interest rate to pay off credit cards with high interest rates. Again, don't make the mistake of keeping the old credit cards around. Eliminate credit card temptation by living on a cash basis whenever possible.

Credit Card Debt Relief Companies

The debt relief industry is growing every day, as millions of Americans have debt problems. Relief companies offer to help negotiate lower interest rates in exchange for a regular monthly payment. Usually, you pay the relief company every month, and they in turn pay your creditors. You still receive statements, and you can watch your balances drop until they are ultimately zero. Generally, these agencies are reputable, but do some research online before choosing one.

How Credit Card Debt Affects Your Credit Report

Credit card debt can help or hurt your credit report. The difference is up to you. The more credit cards you make payments on, the more opportunities you have every month to show good payment habits. This looks good on your credit profile.

Next, do not max out your credit cards. By having available credit, you are showing financial responsibility to the credit bureaus. The best ways to manage credit card debt in terms of your credit score is to either maintain some available credit or pay off your debt entirely.

Use a Bank for Credit Card Debt Relief

Don’t overlook your bank. It may be the answer to your credit card debt problems. Many banks offer programs for people who want to eliminate credit cards. Because business in home equity loans is flourishing, banks need to compete with loan products, so they offer low interest rates and longer terms to help customers pay off credit cards. In many cases you can set up automatic payments from your bank account. If you don’t find a solution with your own bank, look around at some of the lenders on the web. Chances are, you'll find a bank that can help you. Make sure they are a reputable lending institution and that the interest rate is lower than the ones you are currently paying.

Get Free: Eliminate Credit Card Debt

Maybe a personal loan is the right answer for you. With an interest rate that is usually much lower than the credit cards, a personal loan can replace bad debt with better debt. The key is to pay off the credit cards and never use them again, except in an emergency. You’re shooting yourself in the foot if you take on a personal loan but also keep using terribly expensive credit cards.

If you are buried under credit card debt and you can't make payments, you need to seek help. Don't ignore the situation and the damage it is doing to your credit profile—take control. Don’t be ashamed or embarrassed to seek the help of a credit counselor or a credit card debt relief company. You may need to scale down your lifestyle, your type of car, or where you live to ensure a solid financial future, but the relief from crushing credit card debt will be worth it.