There are actually many ways out there to help you control and eliminate your credit card debt. Before you do anything; cancel all your credit cards. I know we want to keep them around for a rainy day, for an emergency, or whatever. But, the truth is, if you actually had your credit cards for that reason, then you probably wouldn’t have credit card debt right now. So Step number one: Cancel those cards!
The simplest two ways are for those with little debt or a very study income.
1. List your cards, the minimum payment due and the total payment due.
2. Put the card with the lowest payment due at the top of the list.
3. List all the minimum payments and add them up.
4. Figure out how much extra to can put toward your credit card payments. This could be ten bucks, it could be a hundred. Whatever it is, it will help.
5. Add that amount to the payment you send to the card with the lowest amount due.
6. After that card is paid off add the amount you were paying to the card you just paid off to the amount of the next card. For example: Card A had a minimum payment of $30.00, and you were adding an extra $10.00 to the total amount sent the card A. Card B has a minimum of $30.00 as well. I want you to now start sending the card company $70.00 a month. ($30.00 +$10.00 +30.00) You know you can make this payment because you have already been sending out the money each month; it is simply transferring the amount to the next card.
7. Continue with these steps until all cards are paid off. You will find that your last couple of cards get paid of fairly quickly.
This method is only to be attempted if you can control yourself and get a card with a high enough available credit.
Fort this method you take out a new credit card. Yep, that is what I said; take out a new credit card. Get a card with a low introductory APR, or 0% APR for transferred balances. Research these cards first and find one that you are A) Likely to be approved for, B) has a low APR for transfer balances and C) has an available credit that exceeds your current total amount due.
Once the card is received, then transfer all balances of your now canceled cards over to the one card. This gives you a single, low payment that can be paid off quickly and with a less money going out to monthly fees and interest rates. Once all the balances are moved over, check your cancellation polices and cancel this card as well. Most credit card companies hold no major penalties for cancelled cards.
This method can be used only if your credit is still good and a card company is willing to take you on. It also works great if you are struggling to pay your minimum payments and need to find a way to pay out a little less money each month. But remember, the more you pay the faster the card will be paid off and the money going out to the credit card will be yours to keep.
For those of you looking to lower your monthly payments while still removing the debt here are some suggestions for you:
Consider a consolidation company. They will work to remove fees, lower interest and minimum payments while still lowering the amount due. The great thing about these companies is that many of them can also add other bills to this process creating even lower monthly payments. Maybe even low enough that you can pay extra every month, eliminating your debt even further.
Try a loan. Your best bet here is to try and get a loan with your bank. However there are several more loan providers out there looking for your business. The problem here: You will need collateral, so make sure you have it. A loan is not always the best way to go about things, but it can work. It will usually lower your overall monthly payments and these loans are often set to be paid off in 2 to 5 years. This gives you the added bonus of knowing when your debt will be paid off. However, be careful not to fall into this trap: Some loans charge penalties if you pay off your loan in advance, so check the terms of agreement before you sign those papers. We want to pay off the debt as soon as possible, so if you have the extra money, put it toward the loan.
Still there are those of us that has a single high limit card, or so much debt that we cannot figure out ways to get it paid.
For a high limit card try to pay out extra each month. You can also try to find a loan or credit card with a lower interest rate. Again a loan may allow you to pay out less, thus allowing you to pay more and pay it off quickly. Anther card, especially one with 0% transfer balances may have a lower minimum payment due to less interest and fees. The more you can pay out toward your principle balance, the quicker you can pay it off. If that doesn’t work, try one of these below.
For several cards and no way to pay them all, no way to get a loan and no way to transfer balances, and no way to pay out extra every month; well I’m not going to lie, it’s getting tough.
If you are at this point chances are your balances have already exceeded their limits, you have over limit and late payment fees adding up. For starters call your credit card company. See if they will work with you to eliminate those fees, lower interest rates, minimum payments, what ever they can do. This often does not work, but it doesn’t hurt to try. Sometimes just removing all those extras on your bills will get you back on track.
If not, then just stop paying on them. I know it sounds immoral, and I would suggest this only as one of your last resorts. But, you still have to do it right. I want you to save as much money as you can during this time. Wait 6 months or a year, if the company does not call you then call them; see if you can strike a deal. This use to be common. Most companies would take a card that now had a balance due at near $2,500 and drop it to one single full payment of $700 – $900 dollars. Why were they willing to due this? Because you were a customer of theirs for years and the interest you paid out to them has already exceeded that in which you actually purchased with the card. They don’t lose any money on the deal. Don’t be afraid to haggle the price. But, make sure you have the money. They do not take monthly payments. It must be one lump sum in which they can pull directly from your account. Be warned here though: Many companies have been told that these deals are no longer to be made. And some of these companies no longer wish to hold on to your delinquent account. It will end up at a collection agency before the year is up.
This can actually be good thing. A Collection Agency will work with you to pay the card(s) off. They will work with your income, and a smart move here is to set up a payment lower than you can afford, then send out extra each month. The interest and fees have stopped once the agency gets a hold of it, so the more you pay, the faster it gets paid off.
If all else fails, if your credit score is shot and you’ve already lost your house, file for bankruptcy. This is a very last resort. I suggest only doing it if you have to. Only due it if you have nothing to lose. This will create many barriers for many years to come. But, it will teach you how to live without credit, how to live simply and within your means. It may not be the best choice, but it does have a silver lining and I would not be covering all the bases if I didn’t mention it.
I wouldn’t be giving you good information if I didn’t give you a few ways to get a hold of some extra cash to put toward those bills. For starters, sell something. We all have extra junk lying around. A yard sale or putting things up for auction on e-bay can bring in a little extra cash to put toward those cards. If you don’t want it, get rid of it and send it immediately to the card company, the longer you hold on to it, the longer you are likely to spend it on other things.
Try cutting back. Do you really need all those movie channels? What about a land line phone? Or one or more of your cell phones? Can you remove any of those services? What about a cheaper provider?
What about quick jobs? Can you clean a house for some extra cash? Mow a lawn? Pet sit? I say do it, every little bit helps.
There you have it. From simple ways to pay off your debt, to the most extreme, there is bound to be a way in here to help you remove your debt. Now go do it!