12 Easy Ways to Get Out of Credit Card Debt!
Today millions of Americans are trapped by the accumulation of their credit card debt, if you are one of these consumers, please read the methods outlined below for getting and staying out of credit card debt.
1) Avoid Unnecessary Fees and Penalties
Make sure that you understand all the terms and conditions of the agreement with your credit card company. If you don’t have a copy of the terms and conditions of your credit card, then either investigate on their web-site or call the customer service number on the back of the card. Once you undertand the causes of the additional fees and penalties you can take the necessary steps to avoid them.
You can always establish an automatic payment from your bank account to pay your monthly credit card payment. Be sure to establish a payment total that is more than the minimum payment, but won’t excdeed your budget. If you do have any funds left over at the end of the month, use it to make anadditional principal payment on your credit card account
2) Find a Credit Card with a Lower Rate
As I stated before, look on the internet and search for credit cards. Make sure that the rate doesn’t jump up to an exorbitant rate after the teaser period. You may even be able to get a 0% interest rate for the first six months on your new card.
If you can reduce your rate, then that will be less money that you will have to pay each month for your credit card debt.
3) Don’t Add to your Credit Card Debt
If you’re serious about reducing your credit card debt then the first thing that you must do is to make sure that you can’t add to your credit card debt by cutting up your credit cards. This will utterly assure that you don’t add to your debt.
After you do this you will, by necessity be on a “cash basis”, (i.e. everything that you purchase will have to be paid for by cash). This will require you to establish a household budget and learn to live within it. If you locate something that you want to buy and it isn’t in your budget, then you merely won’t be able to purchase it.
4) Never Pay the Minimum Amount Due
If you really want to reduce your credit card debts, you will need to start making payments towards. You will never be able to do this if you continue to make the minimum payments. Learn what the minimum payment is for your particular credit card. It will usually be either the lower of a percentage of the outstanding balance, 2-5%, or a fixed amount which is typically $10-$15.
Even if you stopped charging on your credit card, by paying only the minimum monthly payment, it could take you 15-20 years to repay the entire balance. You will need to consider in your monthly budget an amount for principal reduction of your credit cards. This will dramatically reduce the length of time that it will take for you to repay your credit card debt.
5) Consolidate your Other Debt
If you own your home,you may have some equity that can be utilized to refinance your existing mortgage or take out an additional loan with your home as collateral. The interest rates charged for these types of loans are usually much lower than the rates charged by credit card companies.
6) Look to Your Future Financial Planning
Project an image in your mind of what your future will be like when you have paid off all of your credit card balnaces You will actually be able to save for the things that you want in life and earn money ather than pay interest. This is using positive leverage on your financial condition. Let others pay you money for a change!!
7) Negotiate a Reduced Interest Rate with the Credit Card Company
If your credit rating is still in tact, you will have some negotiating power with your credit card company and you may also be able to consider switching to another company who may offer a lower rate. From time to time credit card companies offer specials for an introductory period of time. You may be able to obtain a lower rate for the initial period.
Search the internet and search for credit cards. There are many, many offers for reduced ilower interest rates. Be heedful however, that the initial teaser rate doesn’t jump up to an exorbitant rate after the teaser period.
8) Be Creative with your Money
You need to think outside of the box to come up with ways to either increase your income or rto educe your monthly espenditures.
Working more hours at your job could result in add to more overtime pay. You might even consider taking a second job for awhile until your credit card debt is under control.
Look in your basement or garage and have a garage sale. You would be surprised what people will spend on other peoples “junk”.
At the end of each day, take all of your one dollar bills and change and put them in a jar. Use this money each month to make additional principal repayments. It is remarkable how much money you can save this way.
9) Repay the Credit Cards that have the Highest Interest Rates First
If you have more than one credit card account, investigate the rate of interest that is charged by each credit card company. Some cards charge unusual fees which may impact the Annual Percentage Rate (APR). Look at your recent statements to determine which cards carry the highest APR’s. Arrange your cards from the highest rate to the lowest rate. Start repaying the cards with highest APR’s first.
To begin your credit card debt reduction plan, you may have pay the monthly minimum payments on several cards, and reduce the debt on the highest interest card first, until it is paid off. This will lower the total interest that you will pay over the term of your credit card and shorten the repayment period.
10) Debt Reduction
If you have a lot of outstanding debt and simply aren’t able to pay it back, talk to your lender. Sometimes the lender will consider lowering the amount of your debt if they regard that you won’t be able to pay any of it. Some repayment is better than no repayment. You must know however that this can negatively impact your credit score which might make it more tough to obtain credit in the future since the credit card company will consider this as a loss, and it will be reported to the credit bureaus as such.
There are credit card counseling services available that will handle this for you. Just make sure that you select a credit counseling service that doesn’t charge. There are free services available. The counselors that charge for their services can be very expensive.
11. Reduce the Amount of Credit Available
After you have cut up all of your credit cards, check the available balance and if you have any remaining call the credit card company and have them lower the available balnce. You will improve your credit score by reducing amunt of credit available You need to know the limit of your credit card. This is the first step towards obtaining your financial independence.
If you find that you must keep a card for emergencies, then keep the credit card that has the lowest credit limit available. This will help force you to stay within your means.
You should call your credit card company and just ask for a lower rate. If they say that they can’t lower your rate, simply tell them that you are going to look for a new credit card provider If you describe another competitor that offers a better rate, your company may even offer to reduce your rate on the spot.
12) Always pay by the due date
You must always make your payments on time. The late charges for not paying on time for many credit card companies can be $35- $50 per month and what is worse, is that these charges will be added to your outstanding balance. If your minimum payment is less than the late charge, then you balance will actually increase.
So if you need any want to get out of debt, just think about the amount of your income that will be freed up.