There are many things you can do to reduce your credit card debt. The first is to stop building more. I have seen many people briefly escape from debt only to fall back into it again. These habits must be changed. You can’t change your habits too fast, but you must reverse debt. Here are some suggestions.
Credit card debt that is too high can be repaid
It is possible to pay off debts at a discounted rate. We used to take 50% of our total debt payment when I was in debt. This was because we felt that it was the best we could do. If you are unable to pay your bills on time, it may be a better option to borrow from your family to reduce your debts by 20-60%. If they believe you are heading for bankruptcy, credit card companies may take half or less of your total payment. This is still possible, but it’s much more difficult now that there are new bankruptcy laws.
Send them a letter detailing your situation and explaining how you will receive the income. Tell them that bankruptcy is most likely and that you would like to settle all creditors before that happens. Let them know they are not guaranteed to be left with nothing and that you will divide your assets among other creditors.
How to spend debt most effectively
If you want to get rid of debt, it is a good idea to pay off the highest interest cards first. For example, if you have $200 in monthly income, limit your spending to the lowest-interest card. . If that one pays off, you can function on the next highest single.
This solid approach can help you save a lot of interest. Let’s say you have three cards. The minimum amount you would spend on each card is $40. You then apply $120 of the remaining $120 to the higher interest card. You can continue to spend $40 on one card, and apply $160 to the other two cards with a greater interest. This is the fastest way to pay off credit card debt.
Excessive credit card debt – Other guidelines
Never ever get credit card insurance coverage. Insurance coverage often stops you from making payments if you become disabled or are unemployed. This insurance is the most expensive and does not eliminate the debt. However, it delays it.
Never purchase credit card safety insurance coverage. If your card is stolen, this insurance covers you for any unauthorized charges. This isn’t important, considering that you only have to pay $50 for theft reporting.
Consolidation loans should be avoided. If you don’t have a strategy to pay off the loan sooner, never consolidate debt. Ten percent is no less expensive than 18% for a 30-year loan, as opposed to five.
You may want to contact a credit counseling agency if you’ve tried these methods but failed. Sometimes they will be able to help you negotiate lower prices with your banks and guide you in reducing your credit card debt.