Ways You Can Cut Credit Card Debt (part 1) This 2 part article will list 8 different ways that you can cut your credit card debt. When it comes to credit card debt, there are many ways you can work to get rid of it. Not everyone has the same credit rating and not everyone has the same interest rates on their credit cards. No matter what your personal situation, these 8 recommendations are helpful and we want to share them with our readers who are looking for a debt free life.
Many of you reading this article on how to get rid of credit card balances may be feeling as if like you are drowning in credit card debt. Many of you may have high interest rats and feel as if you will never be able to get out of debt.
While it will take some discipline and work, there are ways to get out of this debt, so relax and take a look at the following list of ways to overcome your problem and start living debt free:
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Move to a lower interest rated card
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Pay more than the minimum payment on your cards
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Cash out your savings
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Borrow from your life insurance policy
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Get a home equity loan
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Borrow against your retirement plan
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Work with creditors to reduce interest rates
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Get a loan from a family member or friend
Now that you have look at the above list, we want to get into each of these recommendations in detail with you.
Moving to a Lower Interest Card:
This is a real simple step, but hard to achieve when you have bad credit. If you can, stop paying the ridiculous rates that come with those pesky department store credit cards and such. Most of these cards carry a massive 18% or even higher interest rate. Lose them at all costs. Get a better rate from you bank or other credit card company that caries a much more attractive rate 9% or lower. Heck, anything is better than 18% or higher. Try asking your credit card issuer to lower your rate each year. This is granted by your credit card company on a regular basis as long as you are paying the bill on time. You have to ask them they will not ask you. If your credit card company wants your patronage, they will lower your rate yearly if you have a good history with them. Also, never consider those pesky credit cards places like Target offer during the Holidays (or even year-round). Some of you get these cards to buy Holiday presents and end up having an enormous interest rate that you will never pay off if you don’t get aggressive about it. Be smart.
Pay More than the Minimum Payment on Your Credit Card Balances:
Part of the topic we just went over s to pay off your credit card balances as quickly as possible. Remember the cards we mentioned above with the high interest rates? You can’t pay them off by paying the minimum amount each month. Doing that would take years and years (if ever) if you have a high balance. If you are a person who pays the minimum your credit crad company asks for each month - have you looked at the real amount of these payments that actually go towards paying off your debt? Here is a fine example as to what you would be doing if you had a credit card that had a $1,500 balance: If you pay the monthly minimum on this card, you would only be paying $7 towards the actual debt! The remainder of your minimum payment the is interest that goes directly to the credit card company. This is how they make money from you having their card. What’s more, it would take you a whopping 17 years to pay off the card just paying the minimum payment each month. This is if you didn’t make any further purchases with the card too. Now, try paying just $50 more a month on this card and you will find that it will be paid off in only a bit over two years. That is a huge difference fro coming up with $43 extra bucks a month. By skipping dinner out at your favorite restaurant once a month, you could use the money to pay off your credit card a lot faster!
Part 2…
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