How to Get Out of Credit Card Debt
Credit card debt is unfortunately common. It’s so much harder to get out of debt than it is to accumulate it. Once you come to realization about how much you owe, it can be difficult to know how to get rid of credit card debt or where to start. Here are some ways to help you reduce your credit card debt so that you can become debt free.
Pay More Than the Minimum
Many people who have credit card debt are creaking by, making minimum monthly payments and facing down years of minimum payments. While this is an option that makes sense for some people, don’t take it without exploring other avenues!
By sticking to minimum monthly payments, you’re just extending the life of the debt account and increasing what you’ll pay in interest. For example, if you pay $135 a month instead of just $35 a month, that is $100 less that you’re paying interest on. If you continue to make a higher payment each month, you will begin to see your remaining balance quickly decrease.
By paying a larger amount, you will end up paying less interest in the long run than you would if you continued making minimum payments. Even though it may be a stretch, it’s important to pay as much as you can towards your credit card debt each month.
Since it can be difficult to figure out where to find the extra money to pay more than the minimum payment, creating a budget will help you immensely. A budget will help you see how much you’re spending every month and where you can trim down. It is important to realize where your spending is going so that you can evaluate whether your spending is necessary. You might notice a large portion of your monthly income is going towards unnecessary expenses like shopping or eating out. Perhaps you have four streaming video subscriptions, when you could probably do with just one. (Not that we know anything about that.)
The only way to cut down on excess spending is to be aware of it. If you need help getting started, there are many budgeting apps that can help meet your needs. Creating a budget will not only help you pay off your debt, but it will also help you stay on track once your debt is payed off.
Lower Interest Rates
Interest rates can have a huge impact on the amount of money that you end up paying for your credit card debt. All you need to do is make a phone call to your creditor. If you have been a customer for a while, and have continued to pay your bills on time every month, you may be able to get your interest rate reduced. Your credit will also play a role in your interest rate, so make sure that you have good credit before making the call.
Another great way to get your interest rates reduced is by providing an offer that you have received from a competitor. Your creditor might be compelled to match the lower offer so they can keep you as a customer.
Even just a one percent reduction can save you hundreds of dollars in the long run. It never hurts to make a phone call.
If you’re looking for a way to pay off your credit card debt in just a couple of years, debt settlement is a great option.
Debt settlement has helped many individuals reduce their unsecured debt by negotiating down the principal balance. Creditors are willing to negotiate so they’ll get paid a portion of the debt owed instead of losing the entire debt in a bankruptcy proceeding.
If debt settlement sounds like it could work for you, contact one of our professionals so that you can get the best deal possible.