7 Strategies That Will Help You Reduce Credit Card Debt
October 26th, 2009 | 
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1. Identify your debt problem – It’s important you find the main problem that created your credit card debt. Try to cut that specific payment by at least 20%. If you don’t, your credit card debt will only worsen and in the future eliminating your credit card debt will be harder to achieve.
2. Create a Budget and Goal – Remember that the first thing that got you in debt was incorrect money management. You have to set a budget for yourself and work with it. Write down your personal goal, how much you’re allowed to spend monthly and in what period of time you will reach your goal. The most important thing with this strategy is reading it twice a day to yourself and sticking to your plan.
3. Contact a debt management organization – A lot of debt management services will give you free advice and may even help you manage your payments. You can find some non profitable organizations on our debt management service page.
4. Control your spending habits – This is not easy however, very efficient. Don’t use your credit card so often. Try to use cash and reduce your expenses. Don’t eat at expensive restaurants, use coupons to purchase food and in general buy only what you really need. This way of life doesn’t have to last forever I believe that in 2 – 4 months time you will see a big difference.
5. Apply for a debt consolidation loan – If you are in a large amount of debt consider consolidating your debt. A good way to start is by getting a personal loan. If you have an asset such like a home get a secured loan like a home equity loan. Using this strategy you can consolidate your debt immediately and then just pay of the loan in time.
6. Get a Lower APR credit card – Lower APR cards allow you to transfer multiple card balances into one and eliminate the numerous monthly repayments you have been facing. Again, this is not free extra money. Compare all the transfer options available and understand all the terms and conditions. Failing everything, speak to your creditors and negotiate lower interest rates and payments.
7. Pay More Than The Minimum Payment – Creditors make their fortune thanks to the interest you pay. Therefore, the best solution is to pay more than the minimum payment this will reduce your credit card debt and you will also be paying less in the long run since your interest payments will be lower. If you have trouble paying more than the minimum monthly payment, find a second job.
At the end of the day the most important thing to remember is changing your way of life and spending habits. It maybe not the easiest thing to do but, think of the results at the end and the way you will feel.
If you have poor credit rating see our bad credit debt consolidation page, for solutions.
Joel Cohen
http://www.articlesbase.com/debt-consolidation-articles/7-strategies-that-will-help-you-reduce-credit-card-debt-87751.html
Posted in eliminate credit debt
Consolidating Credit Card Debt?
I’m 26 years old and I’m buried in credit card debt. I owe about $30,000. I just finished College and I’m leaving to the Air Force next week. I’ve been doing some research and I found a debt consolidating company that promised to reduced my credit card debt by 60%. They told me to stop paying my creditors and let my accounts go to deliquent status. Once in deliquent status, they will come and they will try to settle the accoutns at lower price. I have the following questions:
1) is this a good strategy?
2) How this will affect me in the long run?
3) Is there an alternative way?
4) Should I file for bankrupcy?
Thanks
I, personally, have never heard of willing allowing your credit cards/accounts to go in to delinqent status.
Several years ago I was thousands in debt and it consumed me. I was over the limit with 2 of my cards, creating the over the limit fee disaster. That, in turn caused me to have late fees, because I couldn’t pay the minimum, plus the over the limit fee. It was a MESS.
I went with Genesis Financial Management. I’m not soliciting anything here, but it really worked for me. I definitely wouldn’t file for bankruptcy if you can help it (obviously).
I would call a non-profit debt consolidation company (like the one I used) and see how much your monthly payments would come to.
If the monthly payment is more than you can handle and you can’t even STRETCH yourself to make that payment….than unfortunately bankruptcy may have to be an option for you.
JUST BE CAREFUL of some of these debt consolidation places. I have heard that some of them charge you astronomical fees. You don’t want that. You just need help.
I’m telling you, Genesis was awesome to me.
Hopefully they can help you!!!!!
GOOD LUCK!!!!
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1. NO..NO…AND NO. There is no guarantee or requirement that the creditors must work with them. Also, during this time you have just trashed your credit.
2. Since you are now delinquent the creditors can and will come after you. This may include filing a suit against you for the debt. Please also note that this could have a negative effect on your Air Force career.
3. Yes…Look at a legitimate Debt Management Program. Here you still pay the DMP program, but they still pay your creditors every month. Check out the National Foundation of Credit Counselors at http://www.nfcc.org . They can give you more information and help you locate one in your area
4. That is a last resort. You should look at Debt Management first. Bankruptcy is more determined by your ability to repay rather than the amount of debt you have. If you decide you must do a BK then also check how this could effect you in the Air Force.
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This is not a good strategy. If your debts get reported to the credit bureaus, you will suffer from it for years to come. Some debt consolodators rope you into contracts that take years to resolve. You will have trouble buying a car or getting a mortgage. You may not be able to rent an apartment if there is a credit check involved.
Most military bases have a credit union. You may want to go there and see what a loan would cost you – a debt consolidation loan, if you will. They may also advise you as to what your other options are. for instance, do you have anything to sell that you won’t be taking with you into the Air Force? You must have bought something with the $30,000. Don’t count on storing "stuff" at mom and dad’s. They don’t need the hassle of working around your things while you are away. If the debt is all for school, you may be able to get a loan for that; even at 7% it is better than the rates you are probably paying.
The military will put you on a "watch list" for counseling if you file bankruptcy. It can effect what level of security clearance you will receive and therefore limit the jobs you are assigned to.
Finally, you may be able to find a credit card that will take all your old debts and put it on one account. Many are tied to the prime rate and it is falling, whereas if you stop paying on a card, they will jack up the rate to 18 – 23% depending on which state they are headquartered in. Then they sell the debt to get some money back and the bill collectors add 50% to the amount you owe. So, doing nothing is not an option.
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If you are going into the military and plan on any job with a security clearence then you need to get yourself current and stay that way or you will NOT be able to gain security clearence. Contact me ASAP so we can discuss some options for you.
Patrick McCullough
Debt Analyst
irishmactx@yahoo.com
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I am a Professional Debt Counselor
Once you have decided to consolidate credit card debt, consult the professionals. There are various good credit card companies and banks, who can handle your request. Do your research before hand, so at the time of consolidating credit card debt, you are sure that it is beneficial for you. Check out for the hidden fees charged by various consolidation plans. A thorough research will save you money later on. http://www.freewebs.com/getanswer/CreditCardDebtConsolidationTips.html
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