How To Act on Credit Card Debt Advice

It is no secret that the world is reeling under the effects of a recession, and with delinquent loans hitting an all-time high, beating debt has proved to be an uphill task. The best way to get out of the debt-web is to repay your dues, but again it is not as simple as it sounds. Another most obvious option is to stop using credit cards and spend only the cash you have. Though it may sound silly, this will indeed keep you away from unwanted debts! Here’s some helpful advice in dealing with your credit card debts:

  1. Consolidate your credit card debts and move them to a card that has the lowest interest rate. Though the process of moving balances to one card is considered to be a pain, you’re sure to save a lot of money and also have more to time to pay. Moving to a zero-interest card is a safe bet, but beware since many of these zero-interest rate cards work as introductory offers, and once you’re signed-up, revert to being full-interest cards. Hence read the fine print before opting for one.
  2. Interest rates act as the key factor in managing debt on your credit cards. The minimum payment due that is calculated by the credit card companies is mostly on the accrued interest and not the principal. Your outstanding balances will therefore not seem to reduce, since the principal does not get cleared. Making double payments to hit the principal and discontinuing your card for further purchases will help reduce your card balances to zero. It might seem harsh to make more than the minimum payment, but it’s an inescapable truth!
  3. Take the advantage of equity built in your home by opting for a low interest home equity loan. Though it turns out to be another payment that needs to be made, you can clear off all credit card debts and in turn save on the massive interest that you will be otherwise paying every month. Home equity loans are offered at really low interest rates, and you can be debt-free at once, but do not forget to overcome the temptation of using your credit card again. Try eliminating it!
  4. If you’re knee-deep in credit card debts and cannot afford to make the minimum payment due, approach the credit card company. Many credit card companies offer to re-negotiate and/or also work out flexible payment and settlement options. Another extension of such an approach is that there are debt relief agencies that help you with the negotiation and settlement process. They help you by negotiating with lenders on the interest rates and amounts which are outstanding. You need to make a minimal regular payment to the debt relief agencies that in turn pay-off the lenders and ensure your balances drop. There are also non-profit debt counseling agencies who assist in not only negotiating your interest rates with the credit card companies, but also work out a debt relief plan for you to make your debt clearance simpler.

The recommendations mentioned above are tips on overcoming credit card debts, but what is most important is to stay away from such debts. Use cash as much as possible, and avoid frequent credit card usage. If you do, try to make a 100% payment. Remember it is better to be safe than sorry!


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