Paying back credit card debt is one of the first steps to financial freedom.
Reports show American credit card debt at the end of 2008 was over $9 billion, and the average household carried over $8200 in debt.
There are ways to climb out of the credit card debt hole with self-determination, discipline and patience.
Furthermore, there are multiple forms of debt relief that are available for the average consumer at this time.
Maximum Instead Of Minimum One of the best places to begin to pay off your credit card debt is to examine it.
How much do you owe on each card? What are the interest rates? What have you been paying each month? Gather your highest interest rate cards first and begin to pay more than the minimum each month.
According to experts, the current average consumer credit interest rate is approximately 16%.
Simply paying the minimum each month will not make a dent in the principal.
You will only be paying interest.
Continuing to pay just the minimum due, it would take years to pay off the entire debt.
Following this rule will insure you save money on interest and will be paying back credit card debt faster.
You then can take the money saved and pay off the next highest interest rate card.
Credit Counseling One way of paying back credit card debt is through debt management plans.
Set up by a credit counseling agency, these plans allow the consumer to make one monthly payment to said agency, who in turn disperses monthly payments to each of the owed creditors.
In the meantime, the agency works to reduce the interest rates on each card.
Negotiate, Negotiate, Negotiate If you have several credit cards with high interest rates, you may be able to talk to the banks to get the credit card rates or principle balances lowered.
Or, you may be behind on payments and eligible for a settlement.
Start the process as early as possible, keep good notes, and be persistent.
Other tips to negotiate lower interest rates or principle balances: 1) Gather any competitor credit card offers you have received with lower interest rates.
If your credit card company refuses to lower your interest rate, you can transfer your balances to one of these lower interest cards.
2) When calling the credit card company, try to bypass the initial customer service representative and go straight to the supervisor or manger.
She is usually the one with the power to negotiate a rate reduction.
3) Be willing to transfer your high interest cards and close the account if you don't get the reduction you are looking for.
4) If you are behind on your monthly payments, you may want to consider settling the debt.
If you are not comfortable negotiating on your own, there are many reputable debt settlement companies out there who could assist you in doing so.
Combine Debt Debt consolidation loans allow consumers to take out one loan to pay off others.
This rolls the payment into one; making it easier to keep up with the debt, extends the terms of the loan, and lowers the monthly payment.
Debt consolidation may reduce stress on the consumer by having just one bill come in the mail rather than ten.
The disadvantage of this option is the temptation to return to bad spending habits once payments have been lowered.
And, if the loan is unsecured, you can bet that the interest rate will be very high! Live a Debt Free Life Credit card debt can take the joy out of life, but there are several ways to pay it off and reclaim your freedom.
The sooner you can find a strategy that works for you, the sooner you can reduce the debt and live the life you want.
Reports show American credit card debt at the end of 2008 was over $9 billion, and the average household carried over $8200 in debt.
There are ways to climb out of the credit card debt hole with self-determination, discipline and patience.
Furthermore, there are multiple forms of debt relief that are available for the average consumer at this time.
Maximum Instead Of Minimum One of the best places to begin to pay off your credit card debt is to examine it.
How much do you owe on each card? What are the interest rates? What have you been paying each month? Gather your highest interest rate cards first and begin to pay more than the minimum each month.
According to experts, the current average consumer credit interest rate is approximately 16%.
Simply paying the minimum each month will not make a dent in the principal.
You will only be paying interest.
Continuing to pay just the minimum due, it would take years to pay off the entire debt.
Following this rule will insure you save money on interest and will be paying back credit card debt faster.
You then can take the money saved and pay off the next highest interest rate card.
Credit Counseling One way of paying back credit card debt is through debt management plans.
Set up by a credit counseling agency, these plans allow the consumer to make one monthly payment to said agency, who in turn disperses monthly payments to each of the owed creditors.
In the meantime, the agency works to reduce the interest rates on each card.
Negotiate, Negotiate, Negotiate If you have several credit cards with high interest rates, you may be able to talk to the banks to get the credit card rates or principle balances lowered.
Or, you may be behind on payments and eligible for a settlement.
Start the process as early as possible, keep good notes, and be persistent.
Other tips to negotiate lower interest rates or principle balances: 1) Gather any competitor credit card offers you have received with lower interest rates.
If your credit card company refuses to lower your interest rate, you can transfer your balances to one of these lower interest cards.
2) When calling the credit card company, try to bypass the initial customer service representative and go straight to the supervisor or manger.
She is usually the one with the power to negotiate a rate reduction.
3) Be willing to transfer your high interest cards and close the account if you don't get the reduction you are looking for.
4) If you are behind on your monthly payments, you may want to consider settling the debt.
If you are not comfortable negotiating on your own, there are many reputable debt settlement companies out there who could assist you in doing so.
Combine Debt Debt consolidation loans allow consumers to take out one loan to pay off others.
This rolls the payment into one; making it easier to keep up with the debt, extends the terms of the loan, and lowers the monthly payment.
Debt consolidation may reduce stress on the consumer by having just one bill come in the mail rather than ten.
The disadvantage of this option is the temptation to return to bad spending habits once payments have been lowered.
And, if the loan is unsecured, you can bet that the interest rate will be very high! Live a Debt Free Life Credit card debt can take the joy out of life, but there are several ways to pay it off and reclaim your freedom.
The sooner you can find a strategy that works for you, the sooner you can reduce the debt and live the life you want.