Your Best Options For Paying Off $20,000 in Credit Card Debt? No ratings yet.

If you are facing credit card debt, then the situation can be quite scary. You might be wondering how you can get out of the debt and what are your options? Such questions often do make the whole situation more perplexed. So, what you should do to stay on top of your financial situation? If you are facing tough time in paying off your credit cards and want to know your relief options, then refer the below-discussed options. But, before we go ahead and discuss these helpful options, let us first get familiar with the warning signs.

What are the warning signs that shows you have excessive debt?

Below are some of the common warning signs that shows you have too much debt –

  • Living paycheck to paycheck
  • Receiving repeated calls from the creditors asking for the payments.
  • When your request for new lines of credit has been turned down.
  • Only making minimum payments for your credit card bills.
  • Making late payment for bills as you don’t have enough money.
  • When you credit card limit has maxed out.

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These Are Your Best Options

Do any of the above-discussed signs have any resemblance to your situation? You don’t need to worry as there are options available through which you can get your debt under control.

  • Avoid using your credit cards

It may be easier said than done, but it works. You don’t have to be a rocket scientist to use a credit card and you can easily overspend without giving a single thought about it. So, the basic step towards credit card debt pay off plan is to ensure you don’t make more purchases using your credit card.

  • Get all the details right

You need to gather every single detail regarding your credit card that includes paper bills, online accounts, and all the details of the credit cards you have. Then, your next step is to calculate the balances in order to get familiar with the debt you actually have, so that you can have an effective plan to pay that bill.

  • Have a set budget

You can set a budget each month of projected expenses and income. Once you have done this, you actually get to realize if you have missed out any opportunity to direct your money towards paying off the debt. While you may look at it as a laborious job, budgeting can surely help you in eliminating your debt.

  • Make your payments on time

Probably one of the important points here is to make timely payments. If you continue making late payments, the creditors will penalize your payments and often you have to pay high interest rate. So, whether your choice of payment is via mail or online, ensure that it is made on time.

If you are unable to make the minimum monthly payments, then you definitely need to take some extreme step. You will surely be benefitted if you choose to consolidate your debt. Debt Consolidation is a type of refinancing where you combine your multiple debt accounts into one account with a lower monthly payment. With this method, you also get to streamline your debts; this helps you to have one monthly payment, often the interest rates are lower.

  • Make more than minimum payments

If you keep yourself limited to making only minimum payments, then you won’t be able pay off your debt quickly and you will actually end up paying more amount than you actually spent.

  • Concentrate more on the cards having low balances or higher interest rates

You can make a smart move to pay off your credit card debt by paying your smallest balance first. This will help you to attain instant success and above all it will also help in setting pace. According to some financial experts, you should first go for the credit cards with higher interest rate – which helps you to save money in amassed interest. No matter which way you choose, the main focus is towards paying off your credit card debt as soon as possible.

  • Choosing the method of balance transfer

If you are seeking to have a decent credit, then applying for balance transfer can be your best alternative. Using this method, you get to easily transfer your full balance from one credit card to another one that is having 0% interest rate. You will be saving a considerable amount in interest charges and you get to cut down the months from your debt repayment plan as well. Having said that, you have to be extra cautious though, and make sure you stick to the original plan of making consistent payments to bring down your balance.

  • Request rate abatement

You may feel awkward to get in touch with your credit card company asking them to cut down your interest rate, but it indeed works. There is no company that can afford to lose business; therefore some companies will cut down the interest rates to keep you as their customer. It is imperative you are polite while talking to your credit card company but at the same time you should be confident enough to put forward your views as well. In case, the company does not show any interest in working with you, let them know that you will choose to transfer your balance to some other company at a lower rate.

  • Having a good debt relief service provider

Even though you have found the right option to get yourself out of the debt, you have still long way to go. You also need to have a good debt relief program or service provider who can guide you to move in the right direction. Remember one thing, having a good and reputable Debt Relief Company does play a major role in your quest to be debt-free.

Your credit card bills are high and with high interest rates, things are getting out of your hands. Deep down inside you realize that you require an effective way of paying back what you owe. You need to get out of the debt without damaging your credit also. In simple words, you need to have an effective solution that helps you to pay off your credit card bills quickly.

Alas, not every method will prove helpful in getting rid of your debt. The ideal way is to find out a relief plan depending on your financial hardship and while you do that make sure you avoid using all those methods that can make your situation from bad to worse. The following discussed information, in the form of Do’s and Don’ts, will help you make a smart decision.

Credit Card Debt Do’s –

  • Contact your creditors first

While you are struggling with your debts, if you are thinking of not sharing complete information with your creditors then you should think again. The creditors are not that bad at all, they are always interested to keep you as a lifetime customer. You can have a word with your creditors if they are ready to cut down the interest rates, remove the penalties and the fees or to accept a reduced payment until you catch up.

  • Consulting your friends and family members

When you are facing multiple debts, you don’t want the people know what you are going through, ideally it shouldn’t be this way. Most of us have gone through some challenges while using credit. Bearing that in mind, you can sit across with your family members or friends to see if they have also faced such situation and what solutions they used to get out of it.

  • Gather information about the company

The fact cannot be denied that there are multiple companies offering legitimate debt relief services, but along with that there are scams too. Make sure you have checked Better Business Bureau and cross-checked online reviews before you sign on any document.

  • Stick to the action plan

In order to get out of credit card debt, you need to have an effective plan; all you need is to stick to that plan. You should know that you can’t get deliverance from your debt in few years. It may require extra efforts from your side or even may need to cut back your expenses.

Credit Card Debt Dont’s

Now that you are aware of the things you should do, let us take a look at the things you have to avoid –

  • Avoid using a solution without having knowledge of the cost

No matter what option you finalize to get out of the debt, it does have a cost – there is a balance transfer fees of 3% per balance that you choose to move, there are interest rates for consolidation loans, and even debt management programs have their own fees. So, make sure you are aware of the cost element before signing for a debt relief option.

  • Avoid using credit cards

Till the time you have eliminated your debt completely, make sure you avoid using credit card. It has been seen quite often that people tend to start charging before they have paid off their debts completely, make sure you don’t commit such mistake. Yes, while you using a relief plan, you can use your credit cards, but it does not mean that you actually should.

  • Take expert advice

Yes, you are facing tough time paying off your debts but it’s not that this problem is unsolvable. You should take expert guidance and make sure you don’t feel embarrassed sharing your problem with your friends and family members. There are so many credit counselors who can help you get out of the debt. They are there to help you out and they are not going to laugh at your sufferings. These experts have years of experience in dealing with such situations and will be able guide you in a better way.

  • Avoid the old bad financial routine

Once you have dragged yourself out of the debt, it is important to stay that way. You can go online and learn how you can use your credit cards tactically so that you don’t have to deal with the debt problems again in the near future. Developing better financial habits can really prove helpful in maintaining your fiscal health.

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How To Get Rid Of Credit Card Debt – A 6-Step Debt Relief Plan No ratings yet.

When you are stuck deep in financial crisis, particularly when you owe a lot of money to your Credit Card Company or creditors, you will certainly look for a debt relief plan that can help you out.

Following Queries will be answered in this post:

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The reason why you are facing this problem with debt may not even be your mistake. There can be various other reasons responsible for it such as losing your job and failing to get a new one. Maybe there was a medical emergency that led to increased medical bills or you have gone through a costly divorce that annihilated all your finances.

Of course, maybe you are only responsible for your debt. But despite the reason of being in the debt, you are aware of one thing and that is you would want to get out of credit card debt as soon as possible.

First thing first, understand one thing that you are not going to get out of the claws of debt overnight. It took some time to get deep into the debt and it will surely take some time to come out. But, things aren’t bad as it seems as you can follow a 6-step plan for debt relief for getting rid of debt fast and forever. So, without any further ado, let us get familiar with this plan that you need to follow religiously –

Get Rid Of Credit Card Debt

Step 1:Be prepared

You need to pull up your socks to get yourself out of the debt. You can do this by assembling all your recent credit card statements along with the loan statements. Don’t overlook, by any chance, the significance of having your credit report from the three key credit bureaus – Equifax, TransUnion, and Experian.

Well, you can go the easy way by exploring the website www.annualcredit.com. Here, you will have ample time to go through the errors (if any) that could be influencing your credit score. It is imperative that you are well-aware of your credit score and it is very easy to do it now. If you find out that your credit score is low, then you don’t need to go berserk, as it is because of your debt problems.

Step 2:Make a list

Remember your old school days when you used to memorize everything by writing; well you have to follow that same thing here also because when you write down something, you tend to remember it for a longer period and moreover you have a written record as well. You need to list down all your debts and to be precise make sure you have included the name of your creditor, minimum monthly payment, your balance, and the interest rates.

Your list should also include the monthly amount you need to pay for each of your debt in three years. In the case of credit cards, you can have a look on your monthly statements. If you have loans, the details might be there on their statements. If you are not able to find it, make sure you have called your loan provider to have this information. Avoid listing your loans on your credit report like family loans or medical bills.

Step 3:Cut down the interest rates

In case, you are paying high-interest rates on your debt then you cannot expect your debt to come down anytime soon. Alas, this will also make things difficult for you to get relief from debt. It is only possible by calling your creditors or your credit card company to lower down your interest rates. But, you need to have a reason why your interest rates should be lowered.

If you are having student loan debt, then you need to explore the website www.studentloans.gov and go through the student loan consolidationand availability of income-based repayment plans. You may be able to find a Pay As You Earn plan (PAYE) or Federal Direct Consolidation loan. You can go for a debt consolidation loan or you can also opt for balance transfer in order to pay off your credit card debt.

Step 4:Calculate your total payoff number

This is where you will have to total your three-year payoff amount of your credit cards. Make sure you have also added the monthly payments of any other debt you might be having. Make a grand total and you will have your total monthly payment.

Step 5:Develop a strategy

A strategy can be of great help in your quest to pay off your debts. Will you be in a position to afford the total monthly payment calculated Step 3 until you have paid off all your debts? If not, then you should contact a credit counseling agency or probably a bankruptcy attorney as to decide which debt you should pay off in the first place. You also have the option of using either the avalanche method where you will first pay off the debt having a high-interest rate or the snowball method, where you first pay off the debt having the lowest balance. Consider this as your ‘target debt’.

After that, set up an auto pay in order to make the minimum monthly payments for all your debts other than the target debt. Make sure you have made the maximum payment on it until you have finally paid it off. You can also make a selection for a second target debt and start making extra payments on it until you have paid off that as well. Then, follow as the famous saying goes – “Rinse and repeat”.

Step 6:Audit your credit score and make necessary changes

Once you have a plan in place, make sure you are extra cautious to track the things just to ensure that you are going in the right direction of making the progress and make the required changes. Monitoring your credit score is imperative just to see if there are improvements. You should be happy that you will get to see improvements over time. When you see it improving, you may want to reconsider having a debt consolidation loan or you can also opt for balance transfer just to save money on your pending debts.

Final words

Well, the main mantra here is to stick to this plan to get rid of debt and make your movements accordingly until you have paid off all your debts. Once you are done with your debts, make sure you refer to the list you made in Step 2 and cross-out all the debts you have paid.

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