23 Oct There are many different methods of getting rid of Credit Card Debt, what’s right for you?
There are several different methods of getting rid of credit card debt, so you will need to figure out what is right for you.
The first method for debt relief is to make sure that you are not creating more debt. Doing this alone is not going to help you to get out of credit card debt, but it can help to make sure that your credit card debt is not going to get any worse. If you are continuing to add to your debt while you are trying to pay it off, then you will not be making a lot of progress. Therefore, you are going to need to reduce the temptation to create even more debt. There are two ways to do this by freezing your credit or cutting up your credit card.
The second method for credit card debt relief is to increase the amount of your monthly payment on the credit card. When you only pay the minimum amount on your credit card, then it is going to take a very long time to get any credit card debt relief. By the time that the balance is paid off through the minimum payments, there is a good chance that you are going to be paying double or triple for your debt relief. The only thing that is okay to pay the minimum on the credit card is when you have the debt repayment strategy in place. This is because it is going to require you to make a big payment on the credit card.
Saving for Emergencies
The third method for debt relief is to build an emergency fund. This is something that might not sound good when you are trying to pay off your credit card because you are going to be thinking that you could use this money to pay off the credit card debt instead of putting it inside of a savings account. But the emergency fund is the best way to make sure that you are not going to create any more debt. Plus, you will have a safety net that you can use instead of the credit card when the emergency actually happens. The ideal emergency fund will be about twelve months of your expenses that you need to live, but there needs to at least about $1,000 in the fund.
The fourth method for debt relief is to pick the one debt that you want to pay off and give it all that you have. There are some people who might only increase the number of their minimum payments by a little bit, but by doing this, it is only going to drop the amount that you owe by a few. In order to see a noticeable difference in the amount of money that you owe, then you need to be making significant payments into one account. This will allow you to make minimum payments on the other accounts. Once you have the one account paid off, then you can do it do for another account until they are all paid off.
Tackling Interest Rate
The fifth method for debt relief is to ask the creditor to see if they will lower your interest rate on the credit card. When you have a high-interest rate, it can keep your credit card debt last longer. Since most of the payment is going to go to the monthly charge of interest and not to the balance on the credit card. If you have a good payment history on your account, then you have a better chance of the credit card company lowering your interest rate. You can also use a balance transfer to get a lower rate if you try to pay off the balance before a promotional rate expires. You need to be aware that after the balance might have a higher interest rate on it.
The 3 M’s: Make More Money
The sixth method for credit card debt relief is to look for different ways that you can put more money towards the credit card debt relief. This is because the more money that you can pay toward the credit card debt, the faster that you are going to be able to pay off the credit card debt. This means that it might be a good idea to create a budget for each month that will allow you to manage your money better. This might even be able to you to figure out ways that you can cut out some of the expenses that you don’t need. Therefore, you will be able to use this extra money for your credit card debt. You could also sell some of the things that you no longer need or generate some income through a hobby that you like in order to pay on your debt relief.
The seventh method for debt relief is to withdraw some money from your retirement fund. But you need to be aware that you are going to have to pay the penalty for withdrawing the money early, and additional tax liability will need to be paid. Then once you are ready to retire, the savings will be shorter because of the money that you took out of the account. It is risky to borrow from your retirement fund because you will have to pay back the loan within a few months if you happen to leave your job.
The eighth method to get relief from credit card debt relief is to cash out of your life insurance policy. If you have some cash available inside of your whole or universal life insurance policy, then you have the ability to put this cash towards your credit card debt. But you are going to need to be careful because sometimes when you withdraw this morning, you could have some consequences on your taxes. It might also be a good option to borrow from your insurance policy in order to get some debt relief. You will need to think about the fact that you could affect the death benefit that the beneficiaries are going to receive when you die.
The ninth method for debt relief is to settle up with your creditors. This is something that you will have to do if you are past due on your accounts. This is also true if you owe more money than you are going to have the ability to pay back over a few years. When you are able to settle your debts, your creditor will be able to accept a one-time payment that will be in the form of a lump sum. This means when this happens that they are going to agree to cancel the rest of the debt that you might have with them. Most of the time, they are only going to do this on accounts that are at risk of defaulting or already in default.
The tenth method for credit card debt relief is to go through credit counseling. This can last from four to six years. Through this, you will have the ability to have a lower interest rate and the minimum payment in order to pay off the credit cards sooner through an extra payment each month. You can let the credit counseling company know which one of the credit cards that they will need to send the extra payment to in order to help with your debt relief. Therefore, your credit card debt will be paid off sooner.