Get Rid Of Credit Card Debt – Did you know that more than 45% of Americans face credit card debt? You are not alone if you find yourself in that position. One more startling fact is that most 20 and 30 year-olds who have credit card debt will be outlived by that debt.
Many of you would like to find a way to pay off credit card debt. The only issue some of you are finding is that the traditional methods are not working. Below we have some tips for you on how to pay off credit card debt, once and for all.
The first thing to do is take your highest interest rate card and pay that down. What about the ones you owe a minimum on?
Pay them down too, but focus on the highest-rate ones before anything else. The goal is to create a snowball effect. You should take the money you save after you pay off the first one and apply it to the second and third cards.
The last thing you want is to take the extra cash and start charging. Use it to pay for everything that is left down. That is the key to paying off credit card debt. You will reduce your monthly rates and fees when you pay down the highest one first.
The goal is to lower the utilization fee. The lower your utilization fee, the better your credit score is going to be.
We know this sounds simple, but one quick way to avoid credit card debt is to not use your cards. The only time experts argue you need one is for emergencies. The other time is if you are making more than enough money that you can pay it off right away. Most Americans are not in that boat right now.
Using your credit cards while paying down your credit card debt is called “self-sabotage”. Did you know that many people are willing to pay twice as much for a product as opposed to paying cash? That is part of the problem.
Using credit cards is blinding you to common sense. That is a reason why a lot of Americans are in credit card debt.
Organization is key to paying off your credit card debt. Lack of organization and clutter will cause mistakes. Not knowing how much you owe and when is part of the problem with credit card debt.
Make a chart of what you owe and how much. Keep track of what you are spending money on. Spending frivolously is part of the problem too.
Say, for example, that you buy something on impulse. You charge more than you should on something you throw away two months later. That is an example of frivolous spending. A chart can help you to see where your money is going, and if you should cut back in any way.
Making a budget works with number three. You need to have a detailed budget. You need to know where your money is going and why. Lack of a budget is another reason why a lot of people face credit card debt.
They overspend in some areas, and not enough in others. They spend frivolously when they should be saving. Buying something you automatically will throw away later could be a casualty of not having a budget.
Try to make two minimum payments every month(if you can afford it). Two minimum payments will help to reduce the credit card debt and your interest fees.
Penalties arise when you do not pay something down right away. A lower rate could increase the chances of you paying a lower fee every month. That will help to reduce what you owe and increase your scores. Lack of credit card debt will also increase the chances of you being approved for things you are being denied now.
Some of you could request a balance transfer. You could be lucky to get a 0% promo rate. That gives you more time to pay it down. Plus, it will let you focus on the higher rate cards, something you might not be able to do right now.
Check on the company’s site below about options for a balance transfer.
The less money you spend on the interest and fees, the more it can go towards paying down the principal amount. The only downside is that there could be a 3% fee attached to the balance transfer. It is not a lot, but that will eat into your costs too. That is why you need to check the transfer fees before you do it.
You can also try to consolidate the debt. That consists of you borrowing from a bank or lender. You can also do something called “peer-to-peer” lending. What that does is give you a chance to pay down all credit cards at once. Then, you can make the payments you were making and pay off the loan.
One Final Thing To Mention
I know it might sound enticing to close your cards, but leave them open for now. Did you know your credit score is partially based on the utilization ratio? ( the total amount of credit you use vs. the number of cards in your name)
Closing the cards prematurely could cause your score to lower. Your utilization rate will spike. That is going to hurt you later.
Do you want to find a credit card debt relief company that can help?
Visit Consumer Credit Card Relief for more information on services to help you get rid of credit card debt. Consumer Credit Card Relief is a trusted name when trying to find a credit card debt relief company. Go to the site now, and see how they can help you.