How to Handle
Credit Card Debt
It's easy to get in debt over your head.
Having too many credit
cards can lead to overspending.
If you limit the number of cards and set a limit on each card, you
can control spending and avoid excessive debt. Carry just one or two
and return all unwanted cards. Or, do away with all your high
interest cards and obtain a credit card consolidation loan to lower
your monthly payment and keep just one card for emergencies.
If your objective is: to reduce interest rates and lower your
monthly payments, avoid bankruptcy, consolidate your bills to have
one monthly payment, or simply get out of debt the fastest way
possible, credit card debt consolidation can help you achieve your
goal and save thousands of dollars at the same time.
Here are 3 ways to go about lowering your credit card debt.
1) Pay down your highest interest debts first. Avoid making more
credit purchases while paying down your debt. Pay the maximum
possible toward your highest interest debt, not your highest
balance. This method allows you to pay down your
debts at the lowest cost.
2) Low interest rate cards can be used as a tool to reduce credit
card balances systematically to get out of debt. In certain
situations it is wise to transfer balances from high interest cards
to new credit cards with low introductory rates, this is known as
card surfing. Apply for a lower interest rate card with an
opportunity to transfer your balances from current high interest
cards. Start paying down your new consolidated balances, doubling
the minimum payment you were paying on the old balances. It is
crucial that you take advantage of the lower interest rate to pay
more each month to reduce your total debt. When the lower initial
rate is about to increase, you can move to another lower rate card,
if one is offered to you. This is one way you can use credit card
debt consolidation but it is trickier and you really have to know
your interest rates.
3) Talk to your own bank. As a way for banks to get, or keep, your
business, they sometimes offer a balance transfer. This process
means that the bank will take your existing credit card balance and
transfer it to their credit card. Many times they will offer you a
lower rate as an incentive to do so. But remember to close out the
credit card that you transferred the balance from.
The interest rate should be less than what you are currently paying
on your credit cards. However, you may be able to negotiate an even
lower interest rate if you do all your financial banking at the same
place you are applying for a credit card consolidation loan.
As a summary, reduce your number of credit cards to one or two,
change your buying habits, consolidate your debt to a lower interest
rate, and pay a little more than the minimum payment each month so
you can pay off that credit card faster and enjoy being debt free.
About The Author
Paul Sauder is a successful
freelance writer providing helpful tips and advice for consumers on
second mortgages and
equity loans. His many years of
mortgage industry experience have helped others understand the
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