Credit card debt can be eliminated over time by managing your money, controlling your spending and consulting with a credit counselor among other tactics. Nobody wants to be in credit card debt but luckily there are many options available to help you get out of debt. The Fair Credit Act allows you to see what is in your credit report for free once per year and allows you to dispute wrong information that could be impacting your credit. You can consolidate your debt with the help of credit counselors or a law firm, lowering your interest rates and helping you pay more toward principal balance every month. Creating a budget and sticking to it will help control costs. Paying off high-interest cards before anything else will lower your overall cost quicker.
Here are some details on how to eliminate credit card debt efficiently and quickly.
Create a budget
A budget is a detailed plan for how you will spend your money. Most people can look at their paycheck and figure out how much income they receive every month. Taking this amount, you can look at every cost in your life and figure out what you need to spend on and what you don’t.
Certain bills like rent (or mortgage), utilities, and various types of insurance are a necessity and typically have a set cost per month. Once you figure out those costs, you can figure out how much is left for other areas and start planning around the money you have left. Are there any foods you typically buy that can be purchased for a lower cost? Could you downgrade the internet, tv, or phone services to save money? Look into every area of your life where you can cut costs.
Once you have found some extra cash, be sure to set it aside for paying off your debt. The more you have available to pay the debt, the quicker it will vanish from your life.
Pay off high-interest rate cards first
Every credit card has different rules and rates. Look at your card’s agreement or call the company to find out what your annual percentage rate (APR) is for each card. Then, be sure to pay off the card with the highest interest rate first until that debt is wiped out. Even if all you can afford are minimum payments, it is worth paying down the highest rate card first.
When you hold a debt on a high-interest card, it creates more interest than the other cards. This is just more fees for you to pay, so it’s always a good idea to try paying off the balance of these cards before any others. While your other cards may go unpaid, at least the amount of interest accruing on them is less than if you failed to pay off the higher rate card.
Get a new credit card with 0% APR and do a balance transfer
Even when you are deep in credit card debt, you can sometimes get another card. Search around for a balance transfer credit card that offers an introductory 0% APR rate. These cards allow you to move the balance you have on another card onto this new card. Once your debt is on this new card, it will incur no interest for the length of time mentioned in the offer.
This is a great way to give yourself time to pay off your debt. Instead of paying a high-interest rate every month to the card issuer, your credit card balances will sit on a 0 percent interest card, allowing your monthly payments to go toward the debt itself, not just interest. If you can put all of your credit card debt on a 0% APR card, even better.
Another bonus: Many credit cards now offer points for every purchase you make. Each point typically equates to one cent and can be cashed out for payment toward the credit card. Basically, the credit card company gives you one percent cash back on your purchases. It may not be much, but it can add up quite a bit over time.
Reach out to a lawyer for debt consolidation
Law firms like Jeffrey B. Kelly specialize in helping people pay down their credit card debts. A lawyer can speak on your behalf to the creditors and garner a deal for you to pay a much smaller amount of your debt rather than the whole thing. They can also help lower your interest rates so you can make higher payments on the principal balance of your credit cards.
Law firms that specialize in debt consolidation understand your situation, so they make sure to charge reasonable rates for their service. Most of the time, they are able to lower your overall cost enough to make up for any fees incurred by hiring them for debt consolidation. In the end, you save much more money when you work with a firm like Jeffrey B. Kelly.
Learning how to eliminate credit card debt is easy, but doing it can be tough. Luckily, there are many ways to handle it. With a bit of financial planning, paying off the right debts at the right time and reaching out for legal help to consolidate, you can wipe out your costs quicker than you may think.
Most importantly, get started as soon as possible. The longer you wait to tackle your credit card debt, the harder it will become to get out of it. If you start now, you will be one step closer to financial freedom.