Ten secrets to pay off your credit card debt

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Debt reduction - Setting a budget
Most people avoid budgets like the plague. When mentioning a budget I've heard comments such as, "Isn't that for retired folks?", "There's no way I can stay on a budget!" and "A budget feels so limiting, like a diet: you see something you want and can't have it because of guilt, shame and restrictions". Yet we all know that restricting our food intake causes weight loss and restricting our spendin... Read debt consolidation article



How to reduce your credit card debt
While there are a number of issues that need to be addressed when tackling credit card debt, the habit of using the credit card when you really shouldn't is a huge contributing factor for most people. The most difficult part of changing this habit is recognizing it in the first place. The fact that it's a habit means that you probably use the credit card to purchase things without even ... Read debt consolidation article



Ten secrets to pay off your credit card debt
Here are ten simple tips to help you pay off your credit card debts sooner. First the boring bit: the first three steps are boring but vital. If you want to take control, you have to know what's going on. Taking control of your finances can feel like a straitjacket, so plan in some light relief for when you achieve each step - but make sure it doesn't cost much money. For example, when you've done step one, invite some friends round for a meal, or go for a walk in a favorite park, or treat yourself to time listening to your favorite album. Repeat your mini-celebrations as you achieve each step.

1. It's likely that if you have a credit card debt, you've got some other debt too. But whether you have or you haven't the first thing you need to do is make a total of all your debts. Don't hide anything - don't pretend it isn't a debt. The more honest you are with yourself, the sooner you'll get financial control back in your life.

2. Once you've got all your debts listed and totaled, make a check on all your regular outgoings for credit cards, food, rent, bills, gas, whatever - weekly, monthly and yearly. For the weekly and yearly ones, convert them into monthly figures. You should now have a clear picture of your regular outgoings as well as how much debt you have.

3. Now what's your monthly income? This figure should be the amount that goes into your paycheck before anything else comes out. Subtract your monthly outgoings from your monthly income. Hopefully the figure you've got has a plus sign in front of it! But even if it doesn't, now's the time to move on to stage 4.

4. How many credit cards do you have? How many loans? You've already totaled the amount of debt. Now you need to get clear about how spread out it is. Debts spread out like an octopus are not a good idea. You end up losing track of some and trying to juggle between them - and all that does is increase your debt.

5. We're talking here about credit card debt, so the next step is to gather all your credit card debts onto one card. You can either use one card to pay off others (use the one with the lowest APR interest). But this is usually a good opportunity to search for a new card with a really low or even interest free offer. You can find these at the American Credit Cards Guide (see link below).

6. When you've got your new card, pay off all the other credit cards immediately and destroy them. No hesitating here. You have to destroy the old cards.

7. Also, immediately set up an automatic payment (to pay the new credit card) to come out of your bank account the day after your salary goes in. This is so you don't see the money in your account and think you've got more money than you really do have.

8. Set the repayment level to at least the total of whatever you paid before when you were paying off several cards. For example, if you had five credit cards and you were paying $100 a month, now you are paying at least $100 a month to one card.

9. Hide your new card until you have paid off your consolidated debt.

10. Finally be careful about switching cards too often - it might not look good on your credit profile.

For a simple, easy to use guide to available credit cards in the USA check out American Credit Cards Guide - http://www.americancreditcardsguide.com.

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Credit card debt problems - Your options explained

What to Do If You Hit the Debt Mire

When debt goes bad, it becomes more than just a financial problem. It can take over your life. If you have a debt problem the earlier it is handled and dealt with, the less likely it'll turn into a crisis, and the more money you'll save in the fullness of time.

The very nature of borrowing means that interest increases over time and if it isn't dealt with promptly, it can spiral out of control and land you into trouble. Particularly with credit cards, when interest payments are large, and a minimum payment offers a seemingly manageable solution; what is actually happening is this: the balance is being eroded like the sea bites away at the shore. It'll disappear into the ocean eventually, but might take many years to do so. What you need is a more radical approach, where chunks of debt are eaten away each month.

Being in debt can be a stressful time. Many people are scared to tell husbands, wives, friends - anyone. There's a kind of stigma attached to the problem, but there is always a way out.

Traditional debt advice proscribes borrowing your way out of a problem. Yet this ignores the reality of most debts. A more advisable and realistic approach would be to never borrow more to get out of debt trouble. If it is possible to borrow more cheaply elsewhere to replace existing borrowing and consolidate your debt, then this is an eminently sensible approach.

The first step should always be to work out your monthly outgoings and try and trim down your spending on luxuries and things you can do without. This doesn't mean you have to live the life of a monk and forgo all worldly pleasures! But by adopting sensible spending patterns you can redirect some of your monthly income into paying off your outstanding balances. Always keep at the front of your mind the fact that the longer the debt smolders away, the more you spend in interest payments.

Those with big debts may save thousands a year in interest by reconsidering their borrowing commitments. Do this in three ways:

i) Lower the interest if possible by moving your debts to reduce the interest cost.

ii) Pay the worst first: prioritize paying off the highest interest rate debts first

iii) Utilize any free debt advice there is. A non-commercial agency will give you good advice, focus you on your priorities, and place any problems in context. Things may not be as bad as they first seem.

Of course, there's other basic, practicable things you can do on your own. It's incredibly important to get on top of credit card debts as soon as possible. Don't default or miss payments. Let the credit card company know if you are going to be unable to pay - it's always better to talk to them than putting your head in the sand.
v If things aren't that bad, there's a variety of easy strategies you can implement that will help ease things for you. Consider a credit card balance transfer to a lender offering a lower rate of APR. This will mean you spend less on interest payments each month and start to attack the overall balance with real venom.

You could take out an unsecured loan as a way of consolidating your debt. Personal loans can give you a consistent cheap debt, and as you must make the repayments each month, it helps provide structure to your repayments. Those with poorer credit scores might not always get decent rates, but it's still often a cheaper option than paying back credit card debt each month, and overall a faster method of repayment.

If you have them, use savings: The interest paid on savings is usually far less than interest charged on borrowing, so paying off debts with savings makes eminent sense. Even if you think of your savings as an 'emergency cash fund' or money for the future, better to fall back on it in the short term and pay it back later, than paying interest to a credit card company so that money for some far flung eventuality is at your disposal.

It's worth mentioning that for many people, credit cards provide sensible short term, flexible lending, that's both cheap and convenient. You should always try and proceed cautiously, but credit card debt woes are not an inevitable consequence of taking them out. Tens of millions of Americans use credit cards cheaply and conveniently every year.

For those who feel they are in trouble, don't feel stigmatized by your debt woes and don't pretend they're not there. Help is at hand should you seek it, and a solution is never far away.

Max Hunter is the author of many credit related articles. If you are looking for help with Home Loans or any other type of credit issue please visit us at http://www.creditcardunlimited.com


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Ten secrets to pay off your credit card debt
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