Credit Card Study

General
What are Credit Cards
Advantages of Credit Cards
Applying for a Credit Card
Children and Credit Cards
Credit Card Terms and Fees
Credit Cards - The Right Tool for Merchants
Credit Cards as a Credit Instrument
Credit Cards Codes and Numbers
How Many Credit Cards are Enough
How to Select the Right Credit Card
Interest Rates for Credit Cards
Online Credit Card Usage
Risks of Credit Cards
Using Credit Card Overseas
Where to Use a Credit Card
Zero Rate Credit Card or Not

Major Credit Card Issuers
Wamu credit cards
American Express Credit Cards
Capital One Credit Cards
Chase Credit Cards
Citi Credit Cards
Diners Club Credit Cards
Discover Credit Cards
Mastercard Credit Cards
Visa Credit Cards

Credit Cards and Debt
Avoiding Credit Card Debt
Bad Credit and Credit Cards
Credit card debt consolidation
Credit Card After Bankruptcy
Credit Cards and Credit History
Getting Out of Credit Card Debt
Filing For Bankruptcy
If a Credit Card Issuer Sues You
The Optimal Credit Card Balance
Credit Card Debt Refinance

Credit Cards and Fraud
Avoiding Credit Card Fraud
Credit Card Fraud Protection for Merchants
Famous Credit Card Frauds
Famous Credit Card Law Suits
How Credit Card Issuers Cheat
Merchant Credit Card Fraud
Protect Your Card
What to Do in Case of Identity Theft
How Consumers Cheat

Types of Credit Cards
Business Credit Cards
Debit Cards vs. Credit Cards
Low Interest Credit Cards
Rewards Credit Cards
Secured Credit Cards
Student Credit Cards
Types of Credit Cards
Unsecured Credit Cards
Zero Credit Cards

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Getting Out of Credit Card Debt

There are many burdens in life but credit card debt and debt in general is one of the most unpleasant ones. You find yourself in a tough situation – you have spent more than you could afford and now you have to squeeze each cent in order to make both ends meet. And what is worse, in most cases getting out of debt is a slow and painful process, even when you know what to do. And if you are at a loss and have no idea how to proceed, the agony could last very, very long.

If you are heavy in debt, you might need to find a professional debt counselor, who will make a detailed plan how to proceed but if you are still not drowning in credit card debt, there are several basic steps you can take:

  • Pay more than the minimum. You might live with the illusion that paying the minimum is enough to get you out of debt. Yes, sooner or later you will be able to pay off your debt completely but in the meantime you will have paid so much interest that you might end paying twice or even three times the initial amount. It is a basic truth that the longer you pay your debt, the more interest you will be charged. The results can really be shocking, as seen from the examples in this article. Needless to say, it is best if you can pay your whole balance but if you can't do it, paying as much as you can is also good.

  • Pay the higher interest rates debts first. As already mentioned, interest is accumulating slowly. So, if you have a credit card debt of $2,000 and the interest rate is 20% and a $2,000 personal loan with an interest rate of 7%, start with the credit card debt. Depending on the time period for repaying, this can save you between $50 and $400.

  • Consider a balance transfer card. The idea of transferring your existing debt to a low-interest or even a zero rate credit card is similar to the other options that involve reducing the interest rate payments. Basically, you get a bargain balance card and transfer your existing debt to it. This way you save because you pay less interest.

  • Other refinance options. Balance transfer cards are not the only refinance options. Refinance is a growing market and many financial institutions offer various financial products that help you pay less interest. This is the basic idea of refinancing – you borrow money at a lower interest rate in order to pay your old higher interest rate debts. However, be careful when you refinance because there are charges, so if you see that the interest rate is low, consider that it might be compensated by other expenses.

  • Consolidate your debts. Debt consolidation is also a good idea, especially if you have many credit cards and they become difficult to manage. Again, the idea is that you consolidate all your debts into one and your new debt has a lower interest rate than the interest rates of your other debts.

  • Clear your savings account. If you have money in your savings account, withdraw it and use it to pay your credit card debt. You might be reluctant to do it but since the interest rates that are charged on savings accounts are many times lower than the interest rates on credit cards, it is not wise to keep money in your savings account. Instead, you can use it to repay your debts and later, when you are debt free, you can start saving again.

  • Cut off your expenses. Probably this is the very first thing one should do when he or she is in debt. By cutting your expenses and not indulging in luxurious life-style, you can save even more than by refinancing, balance transfer cards and the like. Living frugally does not mean that you will deprive yourself of vital things but if you don't spend like mad, you will soon discover how much you can save.

  • Borrow against your life insurance. If your life insurance has a cash value, borrow against it. You are borrowing your own money and generally the interest rate will be lower than the market rates. Well, if you die before you pay it back, this will be a burden for your heirs but credit card debts will also be a liability of them, so actually it is more or less the same.

  • File for bankruptcy. Well, if there is nothing else you can do, you can consider this as an option. Filing for bankruptcy has many disadvantages but if you really can't pay your debts, this might be your last resort to break even and start a new life. You might lose most or all of your property and the stain of bankruptcy will be on your credit report for ten years, so it is really important that you file for bankruptcy when you really, really have no other choice.

There are many more steps in addition to the ones above that you can take in order to break debt free. So, as you see, there is really a lot you can do. Additionally, you can combine two or three of the above methods, this speeding the process further.