How to Take Control of Your Credit Cards: Eliminate Credit Card Debt

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In a pickle and need to get in control of your finances? Check out this post.

How to Take Control of Your Credit Cards -- Eliminate Credit Card Debt

We’ll show you how to take control of your credit cards when you have a growing balance and eliminate credit card debt.  If you are a credit card holder that’s become dependent on a card to get by this post is for you.

How to Take Control of Your Credit Cards - Eliminate Credit Card DebtAbout 1/3 of credit card holders owe more than $10,000 on their cards! Their median debt level is just under $17,500. This is insane to me.  To add insult to injury, credit card companies typically charge a crazy interest rate to your balance. Miss a payment and here come the pesky fees.

Do you even know how long it’s going to take to pay off your balance!?! Most folks don’t and it just costs them MORE money. Let’s get it together…this is your personal finance! Here are some steps you can take to stop charging and taking control of this debt:

How to Take Control of Your Credit Cards - Eliminate Credit Card Debt

How to Take Control of Your Credit Cards - Eliminate Credit Card Debt

Negotiate. You should pick up the phone and negotiate with your credit card issuer. Remember to ask to enter a debt-management program not a debt-settlement program. What’s the difference? Big difference! One will typically stomp on your credit score and the other one won’t. If you enter a settlement and the creditor agrees to take less from you than you owe, you better know that they will likely get this on your credit report. This is going to negatively affect your score. We don’t want that. Get into a debt management program.

I like the concept personal finance guru Dave Ramsey suggests in this video…however, I am all about the math:

Roll-Over. If you have a decent credit score find a credit union or small bank to issue you another card at a lower rate. Work to get a full balance transfer. Sometimes you can’t. I have heard people say stuff like, “I can’t get the whole balance transferred so I’m not doing it.” Uh, why the heck not? If you can get just a portion of it at a lower rate you’ll get some finance relief. Most of the time, people are just too lazy to go through the motions of getting another card(s) for this purpose. I mean seriously…how long does it take to fill out an application and get approved? Faster than it took to make that last online purchase!  Not really, but you get the idea.

CAUTION: Remember that transferring balances usually involves a fee. Make sure you get a cheap one. Do some research and include this in your costs.

How to Take Control of Your Credit Cards -- Eliminate Credit Card Debt

Borrow Against. Some people condone borrowing against Life Insurance, 401K, or getting cash from family etc. This is an option. I’m not big on it because I am a “Gloomy Gus” when it comes to stuff like this. If you lose your job you’ll have to repay that sucker in FULL. I think you should just keep it simple and do the card strategy or consider getting a cheap private loan from a credit union.

Stop Borrowing. Duh! This is the best advice. Stop using the card. Use cash to make your purchases.

So, that’s a start on how to take control of your credit cards and eliminate credit card debt.

Source Material:
“Take Control of Your Credit Cards” Consumer Reports. Nov. 2009: 18-19. Print.

Click Here for the Best Books on Eliminating Debt

Related posts:

  1. Your Debt Consolidation Quick-Start
  2. Cards with 0% Credit Card Transfers
  3. Square Away Your Financial Paperwork & Consider Canceling Credit Cards
  4. 3 Credit Card Alternatives That Curb Over-Spending

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