Strategies for Eliminating Credit Card Debt
62Excessive credit card debt is a growing problem in America, especially during economic downturns. Credit card companies have made it far too convenient for people (including high school students), to set up accounts while they sit back and collect outrageous amounts in interest.
Credit Card Debt
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Unscrupulous Company Behavior
Credit card companies actively solicit young adults ("How teens get sucked into credit card debt"), even before they are old enough to drive. It is a shameful and irresponsible practice on their part, especially since most have not had much experience of how life really works. Rarely do they have enough exposure on how to handle their finances at such young ages.
There is Light at the End of the Tunnel
No matter how big of a hole you have dug financially, you can take steps to lift yourself out. Now is the time to take control of your finances. Take no prisoners and do not look back. The end of every financial heartache has a beginning.
Visit CardWeb.com to search for low-interest rate credit cards.
Strategies
- Always pay more than the "minimum payment required" amount of each card, even if it is a few extra dollars. If you are unable to pay more than the minimum, cut back somewhere in your budget. Paying the minimum each month will get them paid off—eventually—ten, fifteen or twenty years from now. Click here for a calculator that will give an estimate on how long it would take to pay off.
- Some experts say pay-off the smallest first, which allows you to feel accomplished. Others say pay-off the highest interest rate first, which saves quite a bit of money in interest fees. Find a system that works best for you and stick with it.
- Use windfall money (bonuses from work, income-tax refunds, rebates, inheritances, etc.) toward extra credit card payments.
- Contact the credit card company and ask them to lower the interest-rate. You may be pleasantly surprised at how often they will comply to your request. If not, search for a lower interest-rate elsewhere. Every percentage point counts toward saving money.
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Examine your budget and look for other ways to cut back. Credit card debt will linger for eternity if you do not pay more than the minimum payment.
My husband and I did that about 2 months ago. He is working every second he can. We cut everything back. He even works thru lunch and doesn't take anything to eat at all. He just eats here at home. It's like no matter what we try, we can't get it paid down. We don't use the card anymore, but with the high interest rate, it's like we're pulling a doublewide trailer uphill with a bicycle.
Call the 800 number on your credit card statement and ask them to lower your interest rate. If they are unwilling, let them know you will look for a lower interest card. Check out http://www.cardtrak.com/cards/categories/low-rate.
Good luck!
Thanks so much for your help :)
Any time :)
This is good advice eliminating credit card debt is what many will need to do during the current economic crisis.
Thanks for the advice. I never, ever thought I'd have the credit card debt I now have. It's very uncomfortable and I want it GONE so I can start putting my hard work to work for ME, not Citibank! Well done hub. MM
P.S. Any experience/advice with the new practice of credit card companies shutting off people even though they've previously paid off the full balance on time every month?
RA - Yes, once you get credit card debt down and under control, you can save money and rest easy.
MM - Thanks MM. It can quickly get out of hand; however, any money problem can be solved - including credit card debt. Realizing and wanting to work it out is the first step.
Credit card companies are now trying to minimize their risk and that is why they are closing accounts. Long standing customers that have not had activity on their accounts are finding this to be true for them too.
If you don't plan to have a major purchase like a house or car, there is no need to worry. Even if you have the account re-opened, the long credit history will not count.
If you like having the card for emergencies only, charging every so often and paying the bill promptly will keep the account active.
Here is a good article published by USAToday:
Thank you for sharing, this is a very helpful hub. A topic everyone is interested in these days. I recently wrote about this myself because like everyone else, I've been through it too! It's so sad to see all the young kids get targeted so badly.
allshookup 3 years ago
What if you don't have enough to pay more than the minumum? Any advice would be appreciated. Thanks