Tips on Settling Credit Card Debt
Credit card debt can cause serious financial strain. Consumers and businesses trying to pay off credit card balances have to deal with finance charges. This can make settling credit card debts more difficult. There are ways, however, in which cardholders can conclude their credit card debts. This involves a settlement process that includes preparing a budget, cutting expenses and contacting credit card issuers.
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Prepare a Monthly Budget
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A monthly budget is a way to control spending. It lists the amount of income a business or individual makes in a month. It also lists all necessary expenses and their corresponding amounts. When the total monthly income amount is insufficient to pay for total monthly expenses, debt usually occurs. Go through your monthly expenses in detail, listing all necessary expenses like food, water, fuel and rent or mortgage payment. For utility bills, you can look up a few of the previous months' bills to get an average monthly expense amount. Anything not listed as a necessary expense is extra money you have at the end of the month to settle your credit card debt.
Cut Expenses
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Whether you use less water or electricity or prepare more meals at home instead of going out, there are a number of ways you can cut expenses. Instead of going to the dry cleaners, you may be able to save money by doing ironing yourself at home. Downgrading your cable television plan or washing your own car instead of going to an automotive detailer are other money-saving actions. Any money you can save is more money that can go to paying down your credit card debt quicker and reducing finance charges.
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Contact Credit Card Issuers
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The credit card issuer is the company who gave you the credit card. Examples include Discover, American Express and Visa. With a monthly budget and ideas for cutting expenses, you are better able to determine what you can pay toward your credit card debt each month. Call the credit card companies and ask to speak to someone in their customer service department. Be honest about your financial situation. Explain to them your commitment and intention to pay the balance off. Ask if they are able to help you in any way. There is no risk in asking this question. They may agree to waive a few finance charges or to negotiate a debt settlement plan with you. This can help you to settle the debt sooner.
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References
- Photo Credit credit card image by Christopher Hall from Fotolia.com
