Reducing credit card debt is something you need to do if you find it difficult to pay off your monthly credit card bills. What if you don’t want to do that? Not only will you lose more money paying interests than its original principal but you also damage your credit for failing to meet up with the payments.
For that reason, you need to think of ways to reduce and eliminate that debt. And here are two powerful tips that can help you reduce and eliminate your credit card debt.
Reducing Credit Card Debt on Your Own
If you have a lot of creditors to deal with, contact them and try to work out some deals where you can pay them off in affordable installments over a time. Here are a few ways to reduce credit card debt:
- Set up a budget. If you think you can pay off the debt within your means start creating a budget. Stop using your credit cards and only pay in cash for necessary things. This will force you to buy things according to your budget when you have money in hand.
- Transfer you balances to the lowest rate credit card. You will always find 0% offers on the market, where you can get a 0% or low rate APR for some time. Keep track of balance transfer offers and get ready to repeat the process towards the end of the period on the first offer.
- Get a second job. Though this may be tiring, the extra cash can help you pay off the monthly bill on time, thus reducing any penalties.
- Sell unused assets that are in good condition. You can sell off things for extra cash by offering these to a pawn shop, holding a garage sale or featuring them on eBay.
- Borrow money from your equity. Although this method is a bit controversial, you can get a home equity loan to consolidate debts. A consolidation loan carries far lower interest rates compared to credit cards, which can reduce costs in the form of penalties and interest. If you repay this loan on time it can also help improve your credit score.
Hire a Pro for Reducing Credit Card Debt
A budget will help you to manage your debt and to begin eliminating outstanding debt. But if you have excessive amounts of debt then you are going to need to take a little more action to reduce the impact this will have on your life, your credit rating and your future.
You can get help from a reputable credit counseling agency. They will help you to prepare a budget and negotiate with your creditors to reduce payments. Often they will give you other financial management advice that will help improve your financial position.
Another professional service to get help from is debt settlement service. This may be a good option if you have more than $10,000 unsecured debts and you give a reasonable time for the lawyer to negotiate with your creditors. Just make sure you hire the right attorney and you can expect to enjoy a stress-free, new life.
Use a Debt Reduction Calculator to Compare Your Options
Now you can compare your options for reducing credit card debt using the above debt calculator. Simply fill in your total debt, an affordable monthly payment to become debt free, the interest percentage and click the Calculate button.
The result is a graph that shows how much money you can save with debt settlement versus consumer credit counseling versus do it yourself.
Simulation is the good thing you can expect from this software. Simply input different monthly payments to simulate how much time and money you can save when staying current on accounts or paying minimum payments.
So I must say reducing credit card debt is not an easy feat. You have to work hard to achieve your payoff goal. But if you do so, you’ll also rebuild your credit and get a loan with favorable terms soon.