Friday, December 15

How to Settle Credit Card Debt

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Credit card debt can be one of the most stressful kinds of debt. This is mainly due to the fact that minimum payments on a monthly basis seldom bring amounts outstanding down. In fact, should one have a credit card debt of £3000 and the APR is 15% or more, and, repayment is only the minimum amount each month; then it can take up to 27 years to repay the debt. Frightening? Yes of course it is.

So, what do you do to get rid of these credit card debts, or at least get them to a position where repayment is of a reasonable duration and the cost for this is less than the expected interest repayment? one answer, particularly if you are a UK resident, is to use a Debt Management Plan.

A debt management plan does the following for unsecured debts such as credit cards. Firstly, one looks to get the interest frozen on the debt. This means that one is only repaying debt and not debt and interest. Secondly, one carries out an income and expenditure calculation so that an affordable monthly payment is realised. This means one can take responsibility for one’s debt but still pay the normal monthly bills as well.

The easiest way to get onto a debt management plan if you are a UK resident is to simply Google for a debt management company. There are several such companies available and each is able to carry out the operations required to manage your unsecured debt such as credit cards and cash loans.

It is however worthwhile noting that it is worth researching individual debt management companies before you decide to enter a plan as some are of course better than others. Do find out how much of your calculated monthly payment that goes through them to your creditors is actually allocated against your bills and how much is allocated to handling fees.

It is also worthwhile noting that should you try contacting such companies via various financial websites, that there is a likelihood that you will receive many sales calls. It is far better to do your own research and then contact a Company directly.

Should you take the debt management route, you will certainly find that your duration of payment will be far less than it would be if you had remained paying your minimum credit card fee. You will also find that even though you pay a monthly management fee to a debt management company, it will still be far less than the interest you would pay to your credit card company.

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