Credit Card Debt Reduction Needs Careful Planning
By William Blake
It is not a simple matter to reduce credit card debt. Why?
Because it is to easy to use your credit card instead of
using cash. Many people thus find themselves in a cycle of
spending that doesn't seem to stop. Since many credit cards
come with extremely high interest rates, such spending needs
to be nipped in the bud as soon as possible.
The simplest way to start getting rid of your credit card
debt is to stop using it. If you don't do so, your debt
will continue to grow with each month that passes. It is
also recommended to eliminate all but one of your cards.
This card should be reserved for critical situations only.
You should also keep a card with a very low limit and
interest rate.
A second way is to avail the 0% balance transfers that
credit card companies offer from time to time. This offer is
made to lure credit card customers, especially those who
have accumulated large debts. The advantage is that you
avoid paying interest on your debts till the offer period
lasts. This is surely useful saving because your repayments
go towards clearing your principal debt.
You can do this time and time again until your debt is
resolved. Before your current special offer period expires,
you should already be ready to submit an application for a
new card. Sometimes the balance from one card cannot be
transferred to another. If this is the case, pay as much as
possible to quickly lower your balance.
It will not always be possible to find a card that offers
0% interest. If this is the case, investigate to find the
company that offers the current lowest rate and move all of
your debt to that card. Do everything possible to quit
paying so much interest and start paying off more of the
principal.
You can also link your credit card payments to your bank
account. Money from your account will automatically be
removed every month in order to pay your credit card bills,
thus keeping such debt in check.
Some opt to consolidate all of their debt into a single
loan, which is a good idea for two different reasons. First
of all, you will pay a significantly lower interest rate as
opposed to your credit card; secondly you will only have to
make one payment each month instead of the multiple payments
you previously had to.
This will help you to stay on top of of your efforts to
eliminate your debt, and will spare you the hassles of
dealing with several different credit companies.
Wondering if you could be
negotiating lower payments on your credit card? You'll find
plenty of helpful information on the Debtopedia website at
www.debtopedia.com
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20081202