Dealing With Credit Card Debt

Dealing with credit card debts can be a challenge, especially if you find yourself unable to make payments due to job loss, illness, or simply financial mistakes that you made in the past. Fortunately, there are things you can do to manage your debt. Here are some effective strategies for dealing with credit card debts:

Pay Down Balances Using the "Snowball" Method

One way to quickly pay down credit card balances is to determine how much money you have left over after all of your bills and expenses are credited for, and to pay all of the extra toward your small card. Continue until this account is fully paid. Once you are no longer making payments on this account, apply all of your extra income to paying off the second card, and so on. As you pay off each account, you'll have more money available to pay your debts.

Another approach is simply to put all of your extra money towards paying off the balance with the highest interest rate, while making minimum payments on the others. It's up to you to choose the best strategy, but the snowball method actually works to get you out of debt faster in some cases. It all depends on your particular debt profile.

What if I Can not Make My Minimum Monthly Payments?

Dealing with credit card debts can seem impossible if you can not make your payments. Late fees, overlimit fees, and interest rates spiral out of control, making it seem like you're walking up a down escalator. Fortunately, there are debt relief companies that specialize in helping consumers negotiate with creditors.

The first type of debt relief company is a consumer credit counseling agency. The agency negotiates with your creditors to eliminate fees, reduce interest rates, and reduce monthly payments. You usually pay a nominal fee for the service, and you'll make your payments directly to the agency, who will disburse them to the creditor.

If you have enough money or can borrow from a friend or family member to pay off a portion of your debts in a lump sum, you can also deal with credit card debt by negotiating a lump sum settlement. Sometimes creditors will accept just pennies on the dollar in full satisfaction of a debt, because they'd rather receive some payment than risk getting left behind if the consumer files for bankruptcy.

Dealing with credit card debts is no easy task, but with the many options available there is sure to be one that fits your needs. Consider your circumstances to choose the plan that works best for your situation.

Source by Nicholas Hunt

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