How to Pay Down a Sears Credit Card Debt

You may owe an outrageous amount on your Sears credit card, but you have found that it stays about at the same level, no matter how long you have been making monthly payments. The reason is that it charges a high rate of interest while requiring you to only pay a small minimum amount. That is why you will need 30 to 40 years to completely pay off that card if you have a high balance. But there are ways to accelerate the reduction in what you owe. Read on, then persevere.

Instructions

1. Make larger payments than are required. Sears and other issuers of credit cards like the high rate of interest they charge and they want you to remain a customer for a long time. That's the reason why you only have to make a small payment each month on most of them. However, if you begin making larger payments, you will pay down your Sears credit card faster.

2. Consider selling assets to pay down your Sears credit card. Everyone has accumulated things over time, much of which they could easily sell. Remember that what you consider trash is someone else's treasure. You would be surprised by how much you can receive, and you can use that money to reduce your Sears credit card.

3. Use funds from your 401k plan at work to apply to your Sears credit card account. By law, you can borrow from your 401k plan for 6 months and the interest you must pay will go back into your account. You should consider this method only if you can pay back the amount you owe within the 6-month window. Otherwise, you must pay a penalty for withdrawal as well as income tax on the appreciation portion of your withdrawal.

4. Take out a home equity line of credit (HELOC) and use the money to pay down or eliminate your Sears credit card balance. Besides, the interest on what you withdraw from a HELOC is most likely tax-deductible. You should be cautious if you use this method because, unlike your credit cards that are largely unsecured, a HELOC is secured by a mortgage on your home. If you should be unable to make the monthly payments in the future, you could face foreclosure on your home.

5. Negotiate with Sears a reduction in either the principal or interest or both. This is a frequently used tactic when a cardholder runs into financial difficulty. If you feel unqualified to do this, consider hiring a credit counseling company that is adept at doing this. It can reduce the amount of all of your debts and make it easier for you to pay down your Sears credit card and others.

Resources

• More on paying down credit cards