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Informative Articles

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Eliminate Your Credit Card Debt Forever-Without Stress

In recent years, the amount of credit card debt being carried by Americans has reached hundreds of billions of dollars, with interest payments each year that would sink the economies of many small nations. But you can eliminate your credit card debt forever, even if everyone around is stuck in an endless cycle of debt slavery. How? Read on, dear internet friend.

STEP 1: CONSOLIDATE YOUR DEBT.If you have any more than one credit card with a debt due to be repaid, then you're a candidate for credit card debt consolidation. The 'minimum monthly' payment each month includes many variable, including the interest rate, the minimum monthly base (usually around $25 per month of a few percent of the debt, whatever is higher), and any 'fees' you've been charged through the month for things such as using an ATM, writing a check on your card, or, if you deal with companies like MBNA, breathing. To consolidate that debt, simply go to your bank and ask them about a debt consolidation loan. The interest rate will be far lower than the 9% to 29% that credit card companies can charge, and the repayment schedule will be far clearer of the hidden extras (such as insurance) that credit card sharks will hit you with.

STEP 2: CLEAN UP YOUR CREDIT HISTORY.Some people, many of us in fact, will let the occasional credit card payment slip by late, or even miss it all together, if things are a little tight each month. The problem with that is that it sits on your credit card report for the next seven years whenever you do that. So part of eliminating your credit card debt is to ensure that your credit score is clean and healthy. Some people will borrow a small amount from a bank and set up their account to automatically repay it each month, which will cost you not a lot in interest, but will make your credit report look much better in twelve months time. Others will just get ruthless with their repayments - pay a little bit extra than the minimum, pay it on time every time, and call the credit card company and ask them to REDUCE their spending limit whenever the debt goes down by a thousand dollars. The card companies don't particularly like doing

 


that, but they will, and it will help you get a better record when you're not tempted to respend.

STEP 3: IF YOU MUST MISS A PAYMENT - TELL THEM.Contrary to what you might think, missing a payment is not considered nearly as bad by a credit card organization if you just call them and let them know you're running a bit tight this month. Most companies just want to know you're not stiffing them, so will gladly waive a late payment fee, or even allow you to schedule part payments, just as long as you're dealing with them in good faith. And part of eliminating your credit card debt is to deal with these people in the best faith possible.

STEP 4: START USING CASH.It really isn't that hard to use cash. Sure, you end up carrying money that you probably feel uncomfortable carting around, but is carting around a credit card with a $5,000 limit really that much safer?

STEP 5: REPAY AS YOU SPEND.It's not something that is advertised by credit card companies, but most of the time you only pay interest on what you owe when the company prints off your monthly statement. That means, if you spent $100 on the 1st of the month and put it on your Visa or Mastercard, and you paid that $100 back with a check to the card company on the 10th, and they send out your statement on the 20th - you have no debt, and thus, no interest. For those wanting to eliminate credit card debt, this is an incredible opportunity to get the convenience of a credit card, without paying any interest AT ALL. In fact, if you're prompt with your payments, don't spend on big ticket items that will take months to pay off, and you keep your balance down to next to nothing, you can save literally thousands of dollars every year. Remember - repay before statement day. It's the best way to eliminate credit card debt before it even happens.

About the author:

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