05 Mar The Best Ways to Eliminate Credit Card Debt Hands Down
Eliminate Credit Card Debt – Have you ever looked closely at your credit card statements and wondered how could I have gotten so deep into debt? The average American consumer has thousands of dollars in credit card debt. On the day that you turn 18, you are fair game in the eyes of credit card companies. You will be inundated with what appears to be amazing offers of high credit lines at affordable interest rates.
The main problem is that if you are 18 and have never opened a credit line then you have no credit history. In essence, having no credit can be worse than having bad credit. This can lead you to have low credit lines with very high-interest rates and fees. Once you start amassing credit card debt, you remain trapped until all of your outstanding balances have been repaid in full. Here are the best ways to eliminate credit card debt.
Begin with Doing an Assessment of Your Current Financial Situation
If you want to know how to stop credit card debt then you first need to ask yourself what type of personality you have in regards to your own spending habits. Are you frugal or are you prone to compulsive shopping and living outside of your means? Young adults often struggle with defining who they are because they see the nice things that their parents have bought and they want what they have. Being very envious of others can lead you down a bad financial path so it is important to clearly define what your financial goals are early on.
Stop Digging a Bigger Hole for Yourself
If you do not stop charging your credit cards then you will never be able to eliminate credit card debt. You should think of credit card debt as calories, you can never lose weight if you keep consuming more and more on a daily basis. The process can be difficult especially if you live paycheck to paycheck. You should leave only one emergency credit card in your wallet and the rest of your cards can be placed in a locked drawer for safekeeping.
The first step is to start by creating a budget using your income and fixed expenses such as rent, utilities, and transportation costs. You can then try to make cuts in your budget, for example, lowering your cable bill, reducing the amount you spend on clothing and not dining out for several months.
The next step is to total up your outstanding credit card debt. You should use the current monthly statements to do this. Once you have the sum, you can begin to create a plan to repay the debt in an efficient manner. You should tackle the credit card debt with the highest interest rates because you will save money on interest fees.
The final step is to only pay for items in cash or debit card. Many people struggle with this, but it can be done if you stay motivated and focus on removing the grip that credit card debt has on your life.
Contact a Credit Card Debt Company for Assistance
Consumer Credit Card Relief is a company that will assist you on reducing your credit card debt. The employees have a vast amount of experience & resources that you can utilize to set up the best plan to financial freedom. They will consolidate with you your income & expenses and find the right plan for you thats a very simple budget
Increase Your Minimum Payments
Increasing your minimum payments on your credit cards can be a great way to pay down the principal owed. A majority of your minimum payment goes towards your interest fees on purchases so setting aside more money can help pay the cards off faster. You should try to pay off one smaller balance first so that you feel a sense of accomplishment where your personal finances are concerned. You will not know how to stop credit card debt until you use trial and error. There is not a cookie-cutter approach because each individual consumer has a different way of doing things.
Debt Consolidation Can Be a Great Tool to Use
Credit card debt consolidation loans are very popular with consumers. You can apply for a loan and use the funds to pay off all of your credit card debt. One word of caution, you need to take this seriously. Some people pay off the credit card debt but then they go on a spending spree and end up in worse shape than ever before.
When you consolidate your debt, you will have one monthly loan payment that you are responsible for paying on time. Your credit score will begin to increase because the debts have been paid off. You will want to monitor your debt to income ratio so that you can focus more of your efforts on boosting your credit score so that you can achieve some of your short-term financial goals.
Consider Settling Your Debts
If you have a lot of delinquencies on your credit report then settling your debts can be helpful to avoid further collection calls and letters. You can contact your creditors and ask to speak with a representative in the collections department. Then you can speak with him or her to see what options they have in regards to settling on an agreed-upon amount for the debt.
This can be a pretty quick and painless process, but you should have money saved in advance if you want to pursue this avenue. You can often settle debts and receive a discount of more than 30% off so it can be very helpful to you in the long-term. If a debt is charged off then it will remain as a derogatory remark on your credit report for seven years so you want to resolve any outstanding balances before they harm your credit score for years to come.
Chart Your Progress
Each week you should chart your progress so that you can eliminate credit card debt in a way that will ensure that it is a new lifestyle choice for you that you can maintain for years to come. Many people fall off the path because they become overconfident as their credit scores increase. You need to consider meeting with a financial advisor so that you can manage your income and liabilities in a way that sets you up for success.