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HOW TO GET RID OF CREDIT CARD DEBT
Credit card debt can be overwhelming, taking over
your life. Below are some simple steps for your to
follow that will help you get out of debt quickly!
Cut Back On Your Spending
Eliminate any unnecessary spending. This will allow you
to start saving some money for unforeseen emergencies or
opportunities that may arise. From this point on, any
new credit card expenses that incur should be paid off,
in full every month. The little sacrifices you are now
making as a result of your spending changes will help
you shave much more money off your debt every month!
Make Payments That Are More Than The Minimum
If you only pay the minimum, you are basically only
paying that month's interest charges. Pay a little bit
more than the minimum every month. Over time, you will
see that not only will your overall debt decline, the
amount you owe in interest will decrease. If you have
multiple credit cards, use the above formula for all,
but make the most payments to the credit card with the
highest interest rate.
Should I Pay the Credit Card With the Lowest Balance
or Highest Rate?
Sometimes it is not possible to pay more on your
credit card with the highest interest rate. If this is
the case, pay-off your credit card that has the lowest
balance first. When this card is paid off, you will have
freed up more cash that can be applied to your other,
higher interest rate credit cards. Continue this process
until you are completely out of debt.
Apply for a Home Equity Loan
If you are a homeowner, you should really consider an
equity loan for consolidating debt. Interest rates
associated with home equity loans are typically much
lower than credit card rates. Also, home equity loans
are tax deductible! These benefits make an equity loan a
very favorable product for paying off credit card debt.
You will need to exercise some control when utilizing a
home equity loan. Any equity loan is like a credit card.
As you free up money by making payments, the temptation
to spend more will be there. If you fall behind on your
equity loan, the bank financing your loan can foreclose
on your home.
Apply for Unsecured Loan for Consolidating Debt
If you are a renter or a homeowner not interest in a
second mortgage, an unsecured loan may be your answer.
Unsecured personal loan interest rates are also lower
than most credit card rates.
Transferring Debt to a Lower Interest Credit Card
A less assertive method of paying off credit card
debt is to transfer high interest accounts to credit
cards with lower interest rates. As a result, more of
your monthly payments will go towards your premiums and
not your interest rates. We feature some
great credit card deals with low interest rates and
attractive introductory rates!
You should proceed with caution when transferring credit
card balances. The 0% APR and 0% balance transfer
promotions are great! However, be aware of what the
interest rate is going to be after the promotion period
expires. You don't want to end up with a credit card
with an interest rate that is higher than the one you
had before.
In conclusion...
Credit card debt is not only a
financial issue, it
can effect you mentally and it does hurt your credit
score. Taking control of your debt will give you a
healthy piece of mind and will get you back onto the
road of financial freedom with an
improved credit score! Learn why the
value of a good credit score is very important!
Learn more about what you can do to
get rid of your debt in 2007!
Related Reading:
Top Seven Tips for Rebuilding Credit
Rebuilding Credit
Developing a Budget
Money Saving Tips
Financial Strategies
Credit Card Debit & Mortgages
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