Reduce Credit Card Debt – Millions of people in America today are carrying a heavy load of credit card debt, which is obviously nothing to be taken lightly. This kind of debt has an adverse effect on one’s net worth, credit score, and an individual’s quality of life. It is unfortunate that many who are burdened by credit card debt feel like they will never be able to get out of it.
But no matter how much credit card debt you are in, know that there is a solution. It might take so much longer than what you would like and it is not going to be easy, but there certainly is a way out of credit card debt. Here is a step by step process that you have to follow to the T in order to reduce and eventually get rid of credit card debt.
1. Now is the time to stop using your card. There is no way to get rid of credit card debt if you keep on accumulating more.
2. Make a list of all your credit card account balances. Beside each of them, list down its minimum requirements, maximum limits and interest rate.
3. After, contact each of your credit card companies and try to request for a lower interest rate. This is where your patience will be tested. It is expected that the first person you will get in touch with is a customer service representative who will have no authority whatsoever in reducing your interest rate. Be persistent and ask to be connected to the person who will be able to help you out in your quest. It might take a couple more calls before you finally get directed to an authority who will work on your plea. Do not let your temper take control. Keep calm and polite. In the event that out of 10 creditors, you are able to negotiate a lower interest rate to at least one of your credit cards, give yourself a pat on the back and consider it a victory.
4. After you have tried to negotiate the terms of your credit accounts, organize the list you have made in step 2 according to each interest rate – from highest to lowest. Transfer high interest rate accounts to accounts with significantly lower interest. Major creditors provide clients with incredible introductory rates as low as 0 percent. But you have to make sure that the time before the offer expires is long enough to make a difference. Also, closely examine if the charges and fees linked to the agreement are reasonable.
5. Once you have completed those steps, make a new list of your credit card accounts and again organize them according to interest rates – highest to lowest. Prioritize on paying those with the highest interests. You can do this by paying more than the required minimum each month. Ideally, you should be paying double that amount. Channel as much money as you can afford in paying off those debts leaving enough cash for your daily necessities. Prioritize paying off your debt without neglecting to set aside enough cash for your monthly expenditures. It would be useless if you do not have ample cash left to spend for necessities. This will only make you more dependent on the use of your credit card again. In addition, pay your credit card bills as soon as you get them. The possibility of being charged for late payment fees will be negated if you do so. While doing so, do not neglect paying off the accounts with lower interest rates. You can continue making the minimum payments on those.
6. Eventually, you will get to pay off the first credit card account balance in your list. When that time comes, you definitely feel victorious. Watch yourself. Try not to celebrate this occasion by going out on a spending spree.
7. By the time you have paid off the first balance on your list, close the account at once. Be aware that having a number of credit cards with too much available credit to your name can be as damaging as having too much debt.
8. Once you have totally cleared off the 1st balance on your list, take the monthly payments you were sending to that account and add it to the payments you will be making on the second account. Assuming that you have not been using that credit card and you have been consistent in paying the minimum requirement, the total balance should now be considerably lower than when you have started. Surely it would be so much easier and faster to eliminate that debt then.
Steadily work your way towards eliminating the rest of the balances. You would be surprised how easier it would be to reduce credit card debt once the process is underway. Always stay focused on your goal. This would require dedication, commitment, and yes, you have to make some sacrifices. It won’t be easy, but then again, nothing worth having is every easy.