Let me start by saying that credit card debt relief doesn't happen by magic.
Once you get into the position where you own a substantial amount of money on your credit card(s), there's no easy way out.
High interest rates on credit card debt and attractive looking low minimum monthly repayment levels have effectively trapped millions of people in a constant cycle of debt.
Slavery was abolished...and then they invented credit cards!
But if you've got the patience and the desire to repay your credit card debts, it can be done. You can provide your own credit card debt relief. And the techniques that I'm about to show you will help you get it done in the shortest time possible.
Right, let's get started.
1) Stop Spending On Your Credit Card
The first step is to stop digging the hole any deeper. If you keep adding to your credit card debt month by month, it's highly unlikely that you'll manage to repay your debts.
So if you're serious about repaying your debts, get your credit cards and cut them up. Yes, every single one. And you can include store cards in the list of things to cut up. Once you've done that, your debt won't get any bigger (provided you continue to pay the interest every month).
The next step is to get used to paying for your purchases with cash. Paying with cash has three major benefits.
- a) Once you have to physically part with your bank notes, it will make you aware of the amount your are spending
- b) Once you've spent all your cash, you won't be able to spend any more
- c) People who pay with cash tend to spend less
If you want to go further, give yourself a strict monthly budget. And once you've spend up to your monthly limit, you can't spend any more till the next month. Any income in excess of your monthly budget can then be paid towards your debt.
2) Reduce Your Interest Rate
Contact your credit card company and ask them to lower your interest rate. If they won't, just transfer your debt to another lender who is willing to give you a lower rate. The less interest you have to pay, the more money you'll have left to eat into your debt.
3) Get A Zero Rate Credit Card Deal
If you decide to move lenders to get a lower interest rate, look for a special zero percent deal. Card companies often advertise six months interest free credit. You'll be able to repay your debt at a much faster rate when you don't have to deal with interest for six months. But a word of warning: Just because you don't have to pay interest for six months, don't ease up on your efforts to become debt free. In fact, make it your goal to repay as much as you can afford during these six months.
4) Consider A Credit Card Consolidation Loan
These loans will help you to secure a lower rate of interest, which means your debt will disappear in a shorter period of time. So instead of paying credit card interest of say 20%, you'll be able to pay personal loan rates or perhaps 8% or even mortgage rates or 4-5% if you decide to secure the debt over your home.
That means your debt could be eliminated within a few years, instead of twenty.
But there are dangers. Watch out that you aren't persuaded to borrow more than you already owe and make sure the consolidation loan isn't spread over too long a period. Remember, the longer the loan lasts, the more you'll pay in interest.
And whatever happens, make sure you read plenty about the process before your sign on the dotted line.
5) Never pay The Minimum
If you do that, your credit card debt could take almost 20 years to repay. And due to the high interest rate, you could end up paying three times what you borrowed! So always pay as much as you can each month. If you have a number of credit cards, and you've decided not to consolidate your debt, it's a good idea to focus on repaying the card with the highest rate of interest first.
Here's what to do;
- a) Compare the interest rates on each of your credit cards using the APR rates
- b) Pay the minimum monthly payment on all your cards except the one with the highest rate of interest
- c) Take the credit card account with the highest APR rate and use all your remaining cash to repay as much of it as possible
- d) Do that every month until that card is repaid
- e) Repeat steps a-d until all your credit card debt is gone
This method will allow you to take advantage of the snowball effect. After the highest interest card has been paid off, you focus on the card with the next highest rate of interest. And as you've already repaid one card, you'll have more money to repay the remaining cards. Every time a card it repaid, you'll have more money to repay the remaining cards. So the time taken to repay each card will get shorter and shorter (like a snowball building speed as it rolls down a hill). Keep doing this until you only have one credit card left and put all your effort into repaying it.
And finally, if things start to get difficult, just keep going. Imagine how you'll feel when you make the last repayment and you're finally free of your debt. That's what I call credit card debt relief! |
