The Best Way to Get Out of Credit Card Debt

According to creditcards.com "The typical consumer has access to approximately $19,000 on all credit cards combined." If you're someone who has an unwanted credit card balance, there are ways to get out of credit card debt but you must first make the decision to stop using your cards and begin attacking the balances.

Identification

Different credit cards carry different interest rates, so the first step to getting out of debt is to identify which of your cards have the highest rates. Make a list, highest rates first, and call each creditor to request a lower rate. Explain that you've been offered a better rate and that you'll transfer your balance if they can't help you. Remember, you are the customer, the card company makes money off of your debt and doesn't want to lose you.

Significance

Once you've convinced your creditors to lower your interest rates, take the two cards with the lowest rates and keep them in your wallet for emergencies only. Destroy all of the remaining cards so you won't be tempted to get back into debt. If you can't whip out a credit card on a whim, then you'll only buy what you can afford.

Effects

Make a concentrated effort each month to pay off or pay down the card with the highest interest rate. This doesn't mean pay an extra $5 on that particular balance, this means to pay as much as possible against the balance until you pay it off. Keep in mind that you still need to pay the minimum balance on the other cards at the same time. Work your way down the list of cards, paying off the ones with the highest interest rate balances first.

Considerations

For some consumers, debt settlement may be the best way to get out of credit card debt. From payingpaul.com; "Settling credit cards is the process in which professionals negotiate on your behalf and reach settlements with your creditors for a reduced amount of what you owe in total." This may work for you, but understand that your credit report will be adversely affected during this process. Also, the debt settlement companies don't work for free, so weigh the pros and cons before taking this path.

Prevention/Solution

Once you have your cards under control, either from your own efforts or from debt settlement, resolve not to put yourself in that position again. Only charge what you absolutely must and pay off the balance as soon as possible. Forgo the new sweater or bypass the daily double latte. Find a way to supplement your income with a second job. There are numerous ways to cut your expenses and increase your income if you look for them. Living credit card debt free is a good habit to cultivate.

Resources

• Review credit card debt information