Secrets About Credit Card Debt Elimination

Eliminating credit card debt is one of the top priorities for millions of Americans as credit card balances swell to unprecedented levels. If you find yourself with a serious credit card problem, you can take the steps to eliminate the debt over time. While the credit card company may not advertise some of these tactics, they can help you get out of debt.

Getting a Lower Rate

One of the reasons that many people have trouble getting out of credit card debt is because credit card companies charge such high interest rates. Even making the minimum payment every month can be difficult with these rates. If you want to make some headway with your debt, lowering the interest rate is crucial. In many cases, you can get a lower interest rate from your credit card simply by asking for it. Try calling the credit card company and asking for a lower interest rate. You may be surprised how low of a rate you can get from this.

Settle That Debt

When you miss a payment on your credit card, the credit card company may start calling you and asking you to pay. What they will not tell you is that if you continue to avoid making your payment for a few months, you can potentially settle that debt instead. When you settle credit card debt, you can often pay 50 percent or less of what you owe. Credit card companies do not want to advertise this, but they also know that if you are close to filing bankruptcy, they might not get anything from you. Settling for less is better than getting nothing. However, this method can often have a negative impact on your credit score.

Consolidating Your Credit Card Debt

Credit card companies want you to pay interest on your debt so that they can make money. If you are smart about the process, you can consolidate your debt and save a substantial amount of money on interest. For example, you could open a credit card with an introductory zero percent rate and then transfer your balances to it. This will give you some time without any interest to pay down your balance. You can also consolidate with the help of a home-equity loan or a personal loan.

Avoid Credit Card Programs

Many credit card companies try to get you to join programs that supposedly help you in some way for a fee. For example, they might offer you a job loss protection insurance that will make it so that you do not have to make a monthly payment if you lose your job. In reality, these programs are quite expensive and a make it even harder for you to get out of debt. If you owe a large amount of money, these programs can cost hundreds of extra dollars per month.

References

• MSN: When Debt Settlement Makes Sense; Liz Weston; September 2010
• The Motley Fool: 60-Second Guide to Getting Out of Debt
• ABC News: Tips to Get Out of Credit Card Debt; Ellen McGrith; May 2006
• Bankrate: Want a Lower Credit Card Rate? Just Ask; Lucy Lazarony; October 2003
• Wisebread: Credit Card Insurance? No Thanks.; Nora Dunn; October 2007