You may be one amongst the hundreds of thousands of people who are presently suffering from huge debts payables, and you’ve been seeking exactly for this: the best way out of your dilemma.
Truly, is there a way out? Can one really solve a huge credit card debt?
The answer is actually simple. But it’s not the answer that is actually difficult. The main thing here is this: are you serious about wanting to get out of debt and are you ready to do whatever it takes to make it happen?
Getting out of debt is as easy as 1, 2, 3 …
Steps to Follow
First, cut your credit cards in half. Do this so that you will not be able to use them again or at least until such time that you can pay off all your credit card debts.
Second, know exactly how much you owe. Put everything in writing, in black and white. Be brave enough to face your fear and find out how much debt you have accumulated through the years.
Third, analyze where you went wrong. As you review all your debts, you will know where you spent the money the most. Ask yourself if those expenditures were really necessary.
Fourth, promise yourself that from this moment on, you will take control of your finances the best way you know how; and promise that you will avoid any more debts or borrowings in the future. This is very crucial. This may sound weird to many, but really, committing to something that will alter a lifestyle is a serious thing. A psychologist suggests doing “self-talk”. It’s more like verbalizing a goal. This process helps to make the self “own” the plan.
Fifth, find out if there are options available to you so you can resolve your financial concerns. For instance, find out if your lender offers options for borrowers like you who are in a credit mess. Maybe you can consolidate your credit card debts into one new loan with a much lower interest rate. Doing so would make repayments easier and more affordable.
Consolidation can happen in three ways:
- You can take out a personal loan that can wipe away all the debt on your existing credit cards and giving you one easy payment to make each month;
- You can apply for a new balance transfer credit card and have the debt of all your credit cards in the one credit card account; or
- If you have very large credit limits, you can apply to refinance your mortgage to repay your credit cards.
Choose the best option that will meet your needs and requirements.
Sixth, come up with a plan on how, when, and how much you will pay to settle all your credit card debts. Assess your current income. Check if you have other means to earn. Make a schedule of your repayments. Be sure to pay every month, and pay more than what is due. Do this to accelerate everything; so you’ll finish paying off your debt in no time.
Seventh, consult with your lenders and ask for special consideration. Submit a proposal and negotiate. Express your intent to really pay all that you owe. Submitting a proposal will tell your lenders that you are really serious about your goals and that you’ve really done your part by doing some “pencil-pushing”, and by coming up with a proposed schedule of repayments.
Seriously speaking, getting out of debt is really not that difficult. You just have to want it badly enough for you to have the guts to make it happen.
How To Recover From Credit Card Debt
While credit card debt is easy to get yourself into, recovering from it is extremely difficult. Depending on the damage you’ve done, not only could you be paying for it for a very long period of time, but it could also severely impact your credit score as well. If you find yourself down this path, don’t be discouraged. Here are some simple tips to help you on your path to financial recovery.
This is by far the most important tip to take into consideration. You will never be able to dig yourself out of debt if you’re still continuously spending. Stop charging credit cards, stop buying, and get yourself into the right mindset. As long as you know you can’t spend anymore, you can move forward and begin the process of credit card debt recovery.
Look into consolidation options
Before jumping into repayment, consider your options. Various companies offer credit cards with zero-interest for the first six to 18 months. You could consider transferring the balance of one or more of your cards onto this single card to eliminate the interest that you’re accruing.
What you need to be careful of is making sure you pay off the total before the no interest rate runs out. Figure out when that date is and do the math to see whether you’re capable of paying off your debt in that time period.
Start paying off high-interest accounts
Don’t look at your account balances for each of your credit cards and determine which ones to pay off that way. When you’ve fallen into credit card debt, you need to look into which credit cards have the highest interest rates.
Based on this, you should start paying the highest interest accounts first and then work your way down. Even if you have higher charges on other cards, paying off the higher interest accounts will save you significantly more money in the long run.
Pay off cards individually
Before you attempt to tackle all of your debt at once, pay attention to this tip. Paying off each card, one at a time is your best bet at getting yourself out of credit card debt once and for all. Once you pay off the first one, immediately start paying off the next. Don’t let yourself get carried away over the fact that you paid off a card in full. It’s not time to celebrate just yet!
Once you’ve completely paid off all of your cards, rather than spending money on yourself, but what you’d normally put towards paying off your debt into your savings. This way, in case you ever find yourself in debt in the future, you’ll have a cushion to pull money out of.
Talk it out
While many credit card companies can make your life rather difficult due to fees and what-not, this doesn’t mean you should avoid calling them for questions or help. If you call your credit card company to discuss the options available for your account, it could turn out that there’s a solution through them that’s right for you.
If you find yourself in credit card debt, it’s not the end of the world. By following the tips above and understanding how to take the right approach to solve the problem, you’ll be able to pay off your debt over time and will surely be able to learn from the mistakes you made!
Use Zero Interest Credit Cards To Pay Off Credit Card Debt
Getting a new credit card to pay off your old credit card debt might seem like chasing fool’s gold. But a new zero-interest credit card can help pay off old debt efficiently. Here is a method that can help you get out of the vicious debt cycle with a little discipline and the desire to help yourself.
How Zero Interest Credit Cards Help
Many major credit card companies offer zero interest credit cards to attract new customers with high debt who want to transfer it to a new account at lower interest rates. This helps the companies to build a portfolio of accounts with paying customers. The customer benefits by transferring high-interest debt to new 0% credit cards and then paying it off in a shorter time frame without having to contend with exorbitant interest costs or fees.
How To Find Zero Interest Credit Cards?
Look for credit card companies offering zero percent interest balance transfer programs and open a credit card account with them. The offers on the cards will vary. Look for companies that offer introductory 0% interest rates for the longest period as this will give you longer to pay your debt.
You should be aware of when the regular interest rates will kick in. Many companies will then charge you much higher rates, which will be detrimental to your debt burden if you haven’t paid off your outstanding balance during the interest-free period.
Once you have opened an account, transfer the outstanding balance to your new card. The amount of debt that can be transferred must be within the credit limit of your new account. Once the transfer is made, you must aggressively pay down as much of your credit card debt as possible during the 0% interest phase. The amount you save by way of lesser interest rates can also go towards paying off the debt.
If you still are left with a considerable amount as an unpaid debt on your card, then consider opening another zero interest credit card account and execute another balance transfer to the new company. Repeat the cycle until you are debt-free.
When Should You Open A New Account?
Typically a zero-interest credit card offer is only a limited-time marketing gimmick which allows you to get out of debt faster. Of course, there is a catch. A balance transfer fee is levied when you transfer the debt to your new account. The standard fee charged is 3 percent. This varies by company.
Before, plunging into these 0% balance transfer schemes, it is important to analyze if what you save by way of interest rates on your debt will make up for the 3 percent transfer fee. If you are paying high-interest rates on a large credit card debt, then the 3 percent fee is relatively small. But for smaller debt amounts, and when you enjoy low-interest rates, this type of transfer does not make sense.
Another point to consider is whether you can pay off your debt within the promotional period. If you have a sizable debt, this may not be possible and your outstanding balance will attract regular interest rates which can be steep.
For people struggling with a large credit card debt burden and high-interest rates, zero interest credit cards are a huge opportunity to claw their way out towards financial freedom.
This needs discipline, planning, resources, and commitment to paying off the debt in the shortest time possible. Ensure that you are timely and prompt in your payments and do not default on any agreements with the new company.
Credit Card Debt Consolidation
You should know that credit card debt consolidation services can help to consolidate all your credit card debts into a single debt. It is no doubt that you can get the service as well and there is no reason for you to delay any longer since you got nothing to lose.
Credit card debt consolidation can assist to prevent you from getting harassment from your creditor, as one of the major issues that causing health problems for many debtors is due to stress.
Credit card debt consolidation is going to make the combined debt easy to manage especially if is offered with a lower interest rate. However, in case you get several other accounts involved that weren’t part of the consolidating effort, you might expect to get some time to reduce them to a more manageable level.
Generally, every time a consumer purchases a product or service along with his credit card or perhaps makes use of his credit card as a replacement for cash, he is actually offered an interest-free credit period. The consumer needs to come up with a payment for that credit used on the credit card before the credit period ends.
Generally, debt consolidation programs can also mean debt repayment programs. They can consolidate the majority types of unsecured debts range from major credit cards, student loans, and personal loans.
Usually, the interest rate on a debt consolidation loan is around 17-23%. That can be a significant interest rate which could actually be more than you’re at the moment having to pay for your debt.
Reduce Your Credit Card Debt With Debt Consolidation
If you decided to reduce your debt, then bad credit debt consolidation is a good option that you should go for. This type of consolidation can be a reliable way of repairing your credit scores if you have bad credit.
You shouldn’t let bad credit and excessive debt make you become an unpleasant person. If you seeking the help of bad credit debt consolidation, you are going to get your credit and finances in good shape again very soon.
For those who wish to apply for a personal loan with bad credit, there are lending companies out there in the market as well who are ready to help people to get the bad credit personal loans that are desperately needed by them.
Credit Card Debt Consolidation As Short Term Solution
Finally, credit card debt consolidation is a short term solution to a much larger issue. It is a plan where the debt settlement company instructs the borrowers to make their repayment through a monthly compensation scheme to reduce their debts. You need to understand that debt elimination is different compare to a loan program.
Credit card debt consolidation provides you a chance to cut down your debts under single lower payments on monthly. Therefore, you can remove all high interest rate credit card debts and change them to the new low payments on monthly.