Some free debt management counseling...
If you have really made a firm commitment to stop adding to your debt, first take a deep sigh of relief, then pat yourself on the back for a job well done - you are one of the lucky few that has chosen to break the cycle of debt and start moving towards financial solvency and eventually, prosperity.
Next, you are ready to move on to choosing a the right strategy for credit card debt elimination.
What strategy you should choose depends on the details of your financial situation. Our first strategy is for those who are still current on their credit card payments, even if they are only making minimum payments. If you are not current on your credit card payments - if you are receiving collections letters or your account has been sent to a collection agency or law firm, then you might be best served by skipping ahead to the next section on COLLECTION AGENCIES. For the rest, continue on reading.
Debt reduction help: a simple strategy
This strategy is for those of you who are still current on your payments. It is a rather simple strategy - it involves paying down your debts until you are debt free. Reducing debt requires discipline and planning. Let's divide this strategy into two parts:
- attempt to lower your interest rates
- develop a comprehensive schedule to pay off your debt
1. Lowering your interest rates
There are two simple ways to attempt to lower your interest rates. This first involves calling your credit card companies and asking them to give you a lower rate. Believe it or not, it sometimes works. This method is generally more effective if you have been with the credit card company for at least a couple years and have kept up with your payments.
When speaking with the credit card company,emphasize the fact that you have been a loyal customer and that you have made your payments on time.
You might also mention that you have received offers of lower rates from other companies, but that you would prefer to stay with your current company.
The second method of obtaining lower rates is simply to find a company that offers lower rates and transfer your balance over to that company. More information on this method can be found on our BALANCE TRANSFERS page.
2. Developing a payment schedule
The second part of this simple debt relief plan is to develop a comprehensive schedule of payments which will allow you to pay off your debt altogether. The following is a list of steps involved in this part of the plan:
- Make a list of all your creditors - that is, all the companies that you owe money to. Include all your credit cards, department store cards, gas cards, and any other revolving lines of credit.
- Next, write down each of your current minimum payments for each of these creditors.
- Now add up all these minimum payments. This is your baseline payment.
- Then, list each of your creditors by the amount of interest they charge, from highest to lowest.
- Next, consider how much more you can reasonably afford to pay each month. The higher the amount, the faster you will be debt free.
- Finally, apply this additional amount to the card with the highest interest rate. Once you have paid of that account move to the next card on the list, and so on.
This simple method really works for some people. You might go through a dozen costly debt management counseling sessions just to learn this basic strategy, so implement it now and save yourself several hundred bucks (or more) in credit counseling.
It is just a matter of making the effort to execute this plan and then follow through with it. If you do so, complete debt elimination is really possible.
You can learn about this debt elmination strategy in more detail, click here.
Of course, if, like many people, you are already well behind in your payments, it is best to move on and learn more about the other CREDIT CARD DEBT REDUCTION METHODS outlined in detail on this site.