Credit card debt has been a growing epidemic in the United
States for many years. Today, the average American family has more than
$8,700 in credit card debt. And the problem of credit card debt is
growing even more rapidly, as credit card companies make it easier and easier
for consumers to obtain cards and spend money that they, essentially, don’t
have. Creditors offer enticing initial interest rates to join their
programs or to transfer balances from your existing creditors onto their cards.
Credit card companies earn in excess of $65 billion a year
and nearly one third of that comes from late fees and over the limit
charges. This means that credit card companies have a vested interest in
increasing your debt, not reducing it. When you look for professional credit
card debt help, make sure that the debt management company you’re using does
not work for a credit card company.
Credit Card Debt Elimination
Here are a few things that consumers can do to reduce credit
card debt
1. Stop adding to your credit card debt.
It would seem like common sense, but you’d be surprised at
how many people continue to use their credit cards even when they know that
they can’t make the payments. If you are up to your knees in credit card debt,
accumulating even more of it is not the way to financial stability.
2. Start budgeting.
After years of excessive credit card splurging, it can prove
very difficult to set limits on your spending habits, but drawing up a personal
financial budget is one the key steps in reducing your credit card debt. A
budget helps you recognize unnecessary expenses that could be cut off without
very much trouble. Necessary spending items, such as mortgage or rent payments,
food and utilities, will make up the bulk of your budget. Out of what remains,
allow yourself a certain amount of money to spend as you please, for
entertainment or personal purposes. But make sure that you stick to the fixed
amount. The point is to end the excessive spending practices encouraged by America’s
credit card culture.
3. Pay in Cash
Whenever you can, pay for purchases in cash, not plastic.
It’s not for nothing that casinos give people chips to gamble with: we simply
don’t attach the same monetary value to plastic or cash substitutes than we do
to actual, hard cash. So next time you feel like getting a new pair of sneakers
or are thinking about buying that new big screen television, pay in cash.
Seeing the actual money you’ll be forking over during the purchase will make
you think twice about your expenses and the real effect of impulsive buying.
Aside from personal budgeting and reformed spending habits, there
are, albeit more involved methods of reducing and eliminating your credit card
debt. One of them is credit card debt consolidation. There are many debt consolidation programs available so be sure to do your homework before choosing one.
Credit card debt
consolidation
Credit card debt consolidation is a common method of easing
the burden of credit card debt. It involves transferring all of your credit
debt into a single, zero-percent-interest credit card. While this method may
sound appealing, if not paired with strict financial discipline and planning,
it can easily backfire.
The basics of credit card debt consolidation are these:
creditors often offer low interest rate cards as teasers, offers that will
hopefully entice you into switching credit card providers. Provided you still have
a high enough credit score, you can qualify for one of these cards and use it
to pay off all of your other credit debts. Now you only have to worry about
making one credit card payment.
However, the low interest “teaser” rates only last for about
6 to 12 months. For the duration of the teaser rate, your monthly bills will be
much lower than before and you’ll have some extra money left over. Use it to
pay down your debts!
You see, credit card debt consolidation is not a permanent
solution to the problem. It merely provides you with a financial respite, so
that you can get back on your feet and start reducing your credit card debt.
Budgeting and good spending practices are essential for successfully implementing
the credit card consolidation method of debt reduction.
Negotiating with your
credit card companies
Another way to attack your credit card debt problems is to
approach your credit card providers and ask for an interest rate reduction. The
negotiating process requires that you present the companies with proof of your
current financial situation, so that a renegotiation of terms is justified.
You basically have to show that you are currently unable to
make the monthly payments on your card. As with loan settlement negotiations,
credit card settlement can be a lengthy and nuanced process, but credit card
companies can be surprisingly willing to make a deal with you. It is your
responsibility, however, to get the ball rolling.
If you want to get a personalized and accurate evaluation of
your current credit card debt situation, contact Professional Debt Advisors
today and receive a FREE consultation. We are experts on credit card debt reduction and know how to deal with credit card companies effectively. You
can also find debt help online and other tips on how to get out of debt and
stay out of debt in the future.
If you wish to speak
with one of our representatives, please fill out the form on the right and one
of our Financial Advisors will contact you for a FREE consultation, or
you can call 866-559-3328 for immediate assistance.
GET FREE FINANCIAL ADVICE NOW!
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