Eliminating Credit Card Debt

It is an unfortunate fact that most of the Americans with credit cards carry a balance that results to lifetime debt.  If you wish to eliminate credit card debt, the best techniques should be performed as immediately as possible. Here are a few steps that you can do to begin reducing your debt:

Discontinue Additional Credit Card Use

If you do not stop charging on your cards, you are only adding more into your debt. This is not to say, however, that you should immediately cut your cards or close your account. Closing your accounts can have a negative impact on your credit score, so just simply stop using your cards. No need to have it closed immediately.

List All Your Debt

Write down the name of your credit card, how much you owe, the interest rate, and all other essentials. It also helps if you put the phone number of the cards in case you need assistance from a customer service representative.

Establish a Budget

Although creating a financial plan may be difficult, it is guaranteed to be an effective exercise. With it, you may be able to see how much you are spending on both necessary and unnecessary purchases.  Nondiscretionary elements, such as rent or mortgage, food, insurance, and utilities should make up most of your budget. This does not mean, however, that you will deprive yourself. You can allocate some cash to spend on entertainment and other stuff at least once a month.

Talk to Your Creditor

Don’t be afraid to talk to your creditor about lowering your interest rate. At first, a representative may tell you that this is not allowed or that he or she cannot help you. Don’t give up. Persistence is the key to this kind of situation. In truth, credit card companies can reduce the interest rate especially if the customer has been a loyal one with good payment history.

Check Balance Transfer Offers

Transferring your balance to another card may be one of your choices if you have existing credit card debt. Creditors are now offering low interest fees on balance transfers. Others even waive the interest for several months. This gives you enough time to pay your current debt without the interest fee.

Use Cash Instead of Credit Cards

Emergency situations where you need immediate funds are acceptable. However, if you will only spend on purchases that you have money for, it is unwise to utilize your credit. There is a reason why casinos use chips instead of real cash. When people view the chips, they have the notion that those don’t have the same value as money. Hence, they will bet nonstop and not worry about how much they spend. This is the same with credit cards, which is something both retailers and creditors are aware of.

Start Paying Off Debt

This is the most important part of eliminating credit card debt. The amount of time you need to pay off your debt will depend on how much you owe and your chosen method. Most experts recommend the use of snowball method while others advise against it. You can try transferring the balance of the card that has the highest rate first then pay it off. You can snowball your debt later where you pay off the card with the smallest balance.

Eliminating credit card debt can prove to be extremely challenging, especially if you are really struggling on the financial aspect. With determination, however, you will realize that this undertaking is really doable.