Many Americans are no strangers to debt. Millions of people struggle every day with debt ranging from student loans to mortgages, but one of the most troublesome comes in the form of credit card debt. Many people find themselves overwhelmed and struggling with thousands of dollars of credit card debt, and the problem just gets worse as interest rates add up.
Unless you win the lottery there is no magic solution to paying off credit card debt. It takes time, planning, and careful budgeting to ensure that you pay the balance without creating additional debt in the process.
If you’ve found yourself with mountains of credit card and want to eliminate it, try some of these tips to accomplish your goals without sacrificing the rest of your finances.
Create a Plan
The first step in the process is to create a plan. You’ll need to be absolutely clear on the exact figure of your debt. Some people truly have no idea how much they owe and if you don’t have the correct number you’re not going to get anywhere.
Obtain a copy of your credit report and assess each and every credit card you have. Call the companies or visit their websites to look at your account. Add up each figure so you’ll know exactly where you stand. Then create a separate list of other bills that must be paid each month, such as utilities and rent. Once you have a better idea of your debt amount you can begin to take the next steps.
Call the Credit Card Company
Credit card companies might seem frightening, but it’s in their best interest for you to pay down your debt as well. Sure, they’re making money from interest charges but if you can’t pay your bills they run the risk of never being able to collect. Having an open and honest conversation with them about your problem is a great way to learn more about how you can fix it.
Ask them if a lower interest rate is possible, which would help you pay your balance faster. Many credit card companies also offer debt counseling, which can help you create a plan that works for you and for them. They’re not the scary monsters many make them out to be, so contact them, explain the situation, and ask about your options.
Consider a Balance Transfer
One of the best ways to relieve yourself of high interest charges is to transfer your balance from one card to another. You’ll need to apply for a new card that offers a period of zero interest and you usually need to make the transfer within 3 months of opening the new account.
Most cards offer an interest free period of about 15 months, and after that the interest rate varies. While this seems like a great solution, you should only consider this if you have a solid payment plan in mind. Pay your balance off in the time allotted or you’ll find yourself right back where you started.
Avoid Borrowing Money
Debt consolidation loans are widely available, and they might seem like a great idea, but that’s not always the case. These loans don’t always have the best terms, and you might find yourself paying even more interest than you are currently. Also, these loans are typically geared toward other types of debt and you have better options if credit card debt is your biggest problem.
If you’re truly in dire straits then a balance transfer is likely a better option than a loan. You’ll still need to be diligent about paying the entire balance in the time allotted, but you’ll save thousands in interest charges in the process.
Ridding yourself of credit card debt is no easy feat. People all across the country struggle with this on a daily basis. However, getting out of debt can be done. You need to be upfront with yourself about how much you owe, and then prepare a plan. Talk with your credit card companies and see what they can offer in the way of help, look closely at your balance transfer options, and never borrow money to pay credit cards bills.
Help is out there, and with time, patience, and smart money management you can find yourself debt-free in less time than you think.