personal debt tips

Expert personal debt tips to guide you with your money.

Eliminate Credit Card Debt – Three Simple Solutions

Are you looking for three simple ways to get rid of your credit card debt? The first one is obvious: stop using your credit cards. This may seem too obvious to suggest, but the best way to get a handle on your spending is to spend only the cash you have after your bills are paid. Second, investigate consolidating your credit card debt onto one card with a lower interest rate. Some folks are in a constant process of moving to the next 0% interest rate card. This can be time consuming, but you can save a lot of money and allow yourself more time to pay off the debt. Third, start making double payments. If the calculated minimum payment is only on the accrued interest, make a double payment to lower the principal of the debt. By lowering the principal and discontinuing use of the card for purchases, you'll see that balance reduce quickly.

Managing Your Credit Card Debt

Interest rates are one of a major factor in managing credit card debt. If you have a high balance and you are paying high interest on a credit card, you are spending a lot of money to "borrow" that money from the credit card company. Additionally, the minimum payment that the credit card company calculates for you is only based on accrued interest. By paying only the minimum, you'll never reduce your debt. If you have decent credit and some credit card debt on one of these high interest cards, consider applying for a 0% interest rate card. Be informed however. Many of the 0% rates are introductory – for a limited time. But paying less money to maintain your debt is your first step towards managing and eliminating credit card debt.

Paying High Interest? Look For Credit Card Consolidation

If possible, consolidate your credit card debt. This means transferring the balance from your higher interest credit cards onto a single card with a lower interest rate. As an example, if you have about $200 on each of your credit cards that have interest rates between 11% and 22% and you transfer those balances onto your third card which carries a 5% interest rate, the money you save on interest payments to the other credit cards will help you to reduce the principal on all of your credit card debt. Of course, in order to make this really work, you need to destroy your high interest credit cards. Don't fool yourself into keeping them for an emergency. Eliminate the temptation so you won't dig yourself another hole.

Use a HELOC for Credit Card Debt Consolidation

Fighting high credit card debt can be stressful and almost impossible. Many homeowners are eliminating their credit card debt woes is by taking advantage of the equity built up in their home and the low interest rates being offered currently. If you get a home equity line of credit, you can get a very low interest loan that can pay off your credit cards. Yes, this does become another bill you need to pay, but you can be saving so much money on the interest payments on the credit card debt that you'll be able to pay this HELOC off and soon be credit card debt free. Again, don't make the mistake of keeping old credit cards around. Eliminate credit card temptation by living on a cash basis whenever possible.

Use a Credit Card Debt Relief Company

The debt relief industry is growing every day. Millions of Americans have debt issues; many are overwhelmed with credit card debt, which is why they seek out credit card debt relief agencies. These people will help negotiate lower interest rates in exchange for a regular monthly payment. Usually, you'll send your money to the credit card debt relief agency and they will disburse it to your creditors. You'll still get statements and you'll watch your balances drop until they are ultimately paid off. Generally, these agencies are reputable and will truly help you get your debt down to a manageable level.

How Credit Card Debt Affects Your Credit Report

Credit card debt can help or hurt your credit report. Of course, you need to pay at least the minimum payments on a timely basis. Next, do not max out your credit cards. By having available credit, you are sending a responsible signal to the credit reporting agency. The best ways to manage credit card debt in terms of your credit score is to either maintain some available credit, or pay your debt off entirely.

Overwhelmed? Credit Card Consolidation

If you're overwhelmed by the credit card debt and making late payments, consider making some drastic changes towards credit card debt relief. First, simplify your life by consolidating your credit card debt. You can do this in one of three ways.

  1. Home Equity Loan - You can take out a low interest home equity loan or line of credit and pay off all the credit card debt and have only one payment. In all likelihood, it will be a much more manageable payment and easy to keep current.
  2. You can approach your bank, or another lender about a low interest personal loan to pay off your credit card debt. If you have good credit, could be a good solution. If not, beware of creating yet another high interest loan.
  3. Consolidate your credit card debt onto a single 0% interest or low interest credit card. Then make double payments to make sure you are reducing the principal of your credit card debt.

Credit Card Debt Consolidation Benefits

The benefits of consolidating your credit card debt are numerous, with one of the most important being the peace of mind you'll have when you make just one payment a month, plus getting your credit card debt under control. If your credit is good, you may also be able to negotiate a lower interest rate. The 0% rate is usually introductory, but depending on how much money you bring onto the card, the credit card company may respond by offering you a lower interest rate. In any case, getting your debt and your spending under control, while difficult, will give you a great sense of accomplishment.

Get Free - Eliminate Credit Card Debt

Remember, 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 damage your credit score - take control. Don’t be ashamed or embarrassed to seek the help of a credit counselor or credit card debt relief agency. You may need to scale down your lifestyle, your type of car, or your apartment. By taking control of your financial future, you'll be able to eventually accomplish your financial dreams.

Using a Bank for Credit Card Debt Relief

Don’t overlook your bank. There may be the answer to your credit card debt problems. Many banks offer programs for people who want to eliminate their credit cards. As the home equity loan business flourishes, banks need to compete, so they have low interest and longer term loans that can help. Talk to your own bank first to see what your options are. 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 lending sites 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.