Eliminating credit card debt is a top concern among millions of
consumers. However, many people fail to outline a realistic strategy for
reducing debts. There are many approaches that will put you on the path
toward becoming debt free. Each person must assess his or her own situation
and create a plan. Here are three tips to help you become debt free
within a few years.
Recognize the Problem and Alter Spending Habits
Before you can take the necessary steps to reduce and eliminate credit
card debt, you must first acknowledge excessive spending and resolve to
change your lifestyle. Unfortunately, many people choose to live beyond
their means. Furthermore, many acquire excessive debts because of
trying to “keep up with the joneses.”
Credit cards serve a valuable purpose. They are great during
emergencies and when you are financially strapped. However, if you are charging
more than you can afford to pay, this creates a huge problem. As you
endeavor to eliminate debts, be determined to stop using credit cards. Do
not cancel credit accounts. However, you may consider cutting your
cards or storing them away.
Pay Double, or Triple the Minimum Payment
If you are hoping to reduce credit card debts, you must be willing to
pay more than the asking minimum payment. In fact, paying only the
minimum will make it practically impossible to become debt free. Instead,
attempt to double, even triple your monthly payments. If possible, make a
large payment toward reducing your balance. This method is most
effective.
Obtaining a lump sum of money is challenging. You may choose to use a
tax return or bonus money received from work. Getting a part-time job
may also provide you with the extra cash. If you own a home, take
advantage of your home’s equity. Home equity loans or cash-out refinancing
generally present homeowners with enough cash to payoff high interest
credit cards and other debts.
Use a Debt Management Company
If you need assistance with managing large debts, think about
contacting a debt management agency. Trained debt management specialists will
review your credit and outline a plan for reducing debts. Furthermore,
the company will contact creditors and negotiate a lower interest rate.
By doing so, a larger portion of your monthly payments will go toward
knocking down the principle balance. Thus, helping you achieve your
ultimate goal of eliminating credit card debt.
View our recommended
Debt Consolidators online.
Carrie Reeder owns ABC Loan Guide, an online resource with information about Bad Credit Debt Consolidation
and Debt Consolidation Mortgage loans.
