According to a recent survey result from the federal reserve, Americans owe nearly $1 trillion in credit card debt. So if you are in credit card debt, I want you to know that you are not alone. There are ways to get out of credit card debt, so if you are struggling with credit card debt, Try these tips below.
DEVELOP A PAYOFF PLAN
As with many things, if you do not have a plan, results may not be attainable. Setting a goal will keep you in check. You can start by paying more than the monthly minimum payment. The banks make money from the interest they charge you. So if you only pay off the minimum, not only will it take you longer to pay off, but you also end up paying the bank more money in interest.
You can also try the debt snowball. The debt snowball allows you to prioritize your loans by the amount, and pay off the smallest loan amount first. When you pay off the smallest loan amount, it drives your motivation, and it keeps you going to tackle your next debt.
Another payment strategy to develop is to automate your monthly payments. The last thing you want happening when you are trying to pay off credit card debt is to accumulate late fees. Credit card companies make so much money from late fees, so do your best to stay on course by setting up automatic payments.
NEGOTIATE WITH YOUR CREDITORS
You can reach out to your creditors to negotiate interest rates and monthly payments if your debt has become a burden. Many times, your creditors will come to terms with your negotiation, especially if you are a customer with a good payment track record.
CONSOLIDATE YOUR DEBT
If all the above does not work for you or you have tried the above with no success, you can consolidate your debt into one account. Consolidating your debt into one account allows you to have one payment per month. To do so, you will have to apply for a new credit card (assuming your credit is good). You have to find a card with a 0 dollar balance transfer fee and a 0% introductory interest rate. You will not pay interest on your balance during the introductory period. So the goal is to plan and get rid of the debt before the expiration date. Click here to view a list of creditors who offer a 0% introductory period.
If none of this works, you can file for bankruptcy. That should be the last resort. If you are in an extreme credit card debt and have no means to pay for it, filing bankruptcy will wipe out your debt. Doing so will affect your credit score temporarily but will remain on your credit history for seven to ten years.
If you are struggling to pay off your credit card debt, setting up a budget is always a good place to start. I created the budget worksheet to help people like you keep track of their expenses. Click here to download the free worksheet.
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