Reduce Credit Card Debt

Getting yourself into debt is the easiest thing in the world but, unfortunately, getting yourself out of debt can be a very long and hard road to travel. For many people today it is credit cards which are the root of their debt problem and clearing credit card debt is something which takes a little bit of planning and a lot of discipline.

The first thing you need to do is to start by reducing your expenditure on your credit cards, and preferably to stop using your cards altogether. Credit cards are all too easy to use and the first trick is to leave your credit cards at home when you go shopping and to just take enough cash with you to cover your needs.

Now you are still going to come across things that you want to buy and which you would have bought had you had your credit card with you, but the mere fact that you are going to have to go back home and get your credit card to buy something will make you think twice about it and, hopefully, also get you into the habit of considering whether you really need things. One of the biggest problems with credit cards is that they allow you to make impulse buys and nine times out of ten these purchases are for things which you could well do without.

But reigning in your expenditure is only one side of the equation because you still have to do something to clear your existing debt. Of course cutting down on your expenditure will help because you will now have more money available and should be able to start paying off more of your credit card debt each month. But this may still leave you looking at a considerable time period before your cards are clear.

Another effective way to reduce your credit card debt might be credit card debt consolidation which involves taking your present credit card debts and putting them all onto a single card with a lower interest charge. This does not of course clear any of your debt but it does slow down the rate at which your debt grows each month as interest is added to your account and so gives you a better chance to catch up with the problem. Today there is tremendous competition among the credit card companies and you will find all sorts of incentives being offered to consolidate existing card debt, including such things as an interest holiday with 0% APR being applied to your new card for the first three or six months. As with any financial offer you do however have to read the small print very carefully and make sure that you know exactly what sort of contract you are entering into. If you do not read the small print with care you could find yourself jumping out of the frying pan into the fire.

One alternative to credit card debt consolidation is to simply speak to your own credit card company and ask them if they will lower the interest rate on your current card. You might be surprised to find that with so many people moving their accounts to alternative providers these days many credit card companies will accommodate you in order to keep your business.

There is unfortunately no simple answer to clearing credit cards debts and, no matter how you try to dress it up, it comes down to a mixture of disciplining yourself into reducing your expenditure and paying off as much of your balance as you can afford each month.

TheDebtAssistanceCenter.com provides a wide variety of debt assistance and advice on such topics as settling credit card debt and dealing with debt collection letters.

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If you have accumulated high credit card balances and are struggling to meet your obligations, you may consider negotiating a settlement with your creditors as a way to quickly reduce credit card debt. Debt settlement is a completely legal and ethical way to get out of debt. The incentive for your creditors to settle increases once you fall more than 90 days past due and they believe you may have no choice but to file for bankruptcy protection.

Carrying an excessive level of credit card debt can take a lifetime to pay off. Balances remain high for the vast majority of people with over 95% of the monthly payments applied towards interest and fees. This is no way to live! You can quickly reduce credit card debt within as little as 18 – 30 months, if you are committed to becoming debt free.

The various options people consider when faced with such difficult circumstances include Consumer Credit Counseling (CCC), a debt consolidation loan, personal bankruptcy and negotiating a settlement. The most you can achieve with consumer credit counseling is a reduction in your interest rate. A debt consolidation loan is designed to pay back your creditors over a longer period at a slightly reduced interest rate. This path may seem desirable relative to your current situation, but this will likely take anywhere from 4 – 8 years. Should your financial circumstances weaken, you will be no better off than you were at the outset. While filing for personal bankruptcy may be unavoidable in some cases, it is a painful path to take, which will haunt the filer for anywhere from 7 – 10 years. With bankruptcy, your case file becomes a matter of public record, easily located via Internet search by future employers, landlords or creditors.

Debt settlement represents an honest and ethical alternative to addressing an unmanageable level of unsecured debt. There are many legitimate companies with trained negotiators that can obtain a settlement ranging anywhere from 15 – 50% of the original balance. All you need to do is save the amounts you were paying the credit card companies every month, letting those balances build in your own bank account. This will provide the bulk of the funds to settle, and you will, within a relative short period of time, quickly reduce credit card debt balances. Debt negotiation firms typically charge 25% of the canceled debt, which in addition to late fees and penalty interest results in settling at 55 – 60 cents on the dollar all-in!

Unfortunately it is very difficult for consumers to negotiate directly with lenders. Reputable debt negotiation firms should understand each bank’s process for handling delinquent loans and manage each situation to the client’s maximum benefit. Negotiating a settlement is not always about what you know, but often who you know. Dealing with a cooperative person can make all the difference between obtaining a settlement offer or not. Creditors and collection agencies are not going to write off thousands of dollars without a fight, so you should be prepared to persevere. In the end, you will have reduced your outstanding debt balances and regained control of your life. Negotiating settlements in this manner is the most effective way to quickly reduce credit card debt without exception!

If you would like additional information on debt settlement, tax consequences and rebuilding your credit, please visit: this site for more information about the above topic

Max Roberts is an experienced debt negotiator and credit resolutions specialist who has worked in the financial services industry for over 25 years.

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Almost on a daily basis we receive emails from individuals who have gotten in over their heads with credit card debt. The most common question is, “what can I do to get out of debt?” Of course, asking the question means that they’ve already taken the first and most important step: they have faced the situation and understand the importance of changing it. One major sign of trouble is if you’re having trouble making the minimum amount due each month. If you find yourself in this situation, act now – not later by following these five steps:

1. Get a copy of your credit report and your credit score. You can get a copy online through any of the major bureaus. Once you have it in hand, review it carefully.
2. With the exception of true emergency situations, take a break from making any purchases with your credit card. Make a commitment to refrain from using your credit cards until all of your debt is cleared up.
3. If you have high-interest balances, get a 0% or low interest balance transfer card and transfer as much as you’re allowed. Then use that introductory period to pay your balance down.
4. If you must make purchases with your credit card, deduct that amount from your checking account and put it in savings so that you have it available when the credit card bill comes due.
5. Be careful to pay at least the minimum amount due on each and every credit card – on time, every time. This will help ensure that you won’t be charged costly late fees or incur a higher “default” interest rate.

Denise Wolf is a freelance writer who works with CompareCards.com to help consumers make informed credit decisions. CompareCards.com is a privately held organization and has assisted thousands of consumers in making credit decisions. Use can use the Online Card Comparison tool at www.comparecards.com, to simplify your search of balance transfer cards or to get a copy of your credit report.

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