Paying Off Credit Cards

Posted by Rana & filed under Credit Card Debt Consolidation Information.

Credit card debt – most consumers in America try to avoid it, yet somehow find themselves in it! This is heavily due to the fact that plastic money is convenient and it lets you buy something now and pay for it later. However, before you know it, your bills begin to pile up and you end up regretting all the times you uttered the words, “charge it” to finance your purchases. So how can you eliminate credit card debt? There really is no one particular answer to this question, however there are various ways for you to begin to pay off your credit cards and eventually become debt free.

Credit Card Debt Elimination

If you’re one of the many consumers out there who is in debt as a result of credit cards, it’s time to take some action and pay off those credit cards once and for all. You can finally put a stop to the harassing collection calls and endless “final notice” letters from creditors by considering the following ways to eliminate credit card debt:

Limit your credit card usage Pay more than the minimum payment amount each month Consider a home loan Look into other sources where you could borrow from Transfer balances Renegotiate with credit card companies

As difficult as it may be, one of the most helpful ways to eliminate credit card debt is to use your credit cards for emergencies only and, NO a sale at the mall does not qualify! While stopping using them all together would probably work more effectively, it’s virtually impossible and just not practical. However, restricting credit card usage to the necessities such as fuel, grocery shopping etc. is a good way to achieve credit card debt elimination.

Credit card companies are always telling consumers that they’re making it easier for them to make their payments by offering the option of minimum amounts each month. However, the reality is that when you make minimum payments, the majority of it goes towards your interest charges rather than the principal amount, which is actually what you owe. Therefore, if you keep charging your credit cards and paying only the minimum amount due, your debt will keep on accumulating. So if you want to eliminate credit debt, you have to pay more than the minimum amount due each month.

While taking a loan to essentially pay off another “loan” doesn’t sound like the greatest of ideas to eliminate credit card debt, it does makes sense if you can take a low-interest loan and pay off your high-interest rate credit cards. Additionally, interest that is paid on home loans usually counts as a deductible expense, which is another benefit in addition to credit card debt elimination.

If taking a home loan is simply not an option for you because you don’t own a house, then you can consider other sources from which you can borrow the necessary funding. For instance, you may want to look into borrowing the money from your life insurance policy or perhaps your 401(K) plan. If you do use these options to pay off credit cards, you must remember not to use the money on anything else and concentrate solely on eliminating credit card debt.

You can also review your credit cards and figure out which ones have a lower interest rate on them. If you do have these types of cards, you can transfer the outstanding balances from your higher interest rate cards on to them. You can also look for any zero percent interest rate credit cards that you can shift some of your higher balances on. The “zero” percent rate may only be applied for a limited time period, however remember that every little bit helps when it comes to credit card debt elimination.

If all else fails, you can always try to renegotiate with your creditors. You can explain to them that you are unable to pay the outstanding balances and if they really want their money back (which every credit card company obviously does!), they will work out an alternate repayment plan for you to pay off your debt. Consulting with reputable credit management services can also help you to pay off credit cards. They can offer you valuable advice and show you how to better manage your finances to eliminate credit card debt.

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