There are ways to get rid of credit card debt legally, without spending your lifetime working toward being debt-free. According to CreditCards.com, the average credit card debt per household is $16,007 as of March 2010. With numbers so staggering, the key to achieving financial freedom is to start paying off debt as soon and as steadily as possible.
Step 1
Create a payment plan. Figure out how much you owe, the interest rate of each card and what penalties, if any, you are incurring by paying late. Then pay the minimum monthly payment on every card. Any extra money you have available should go toward the card with the highest interest rate, so you can prevent the debt from growing.
Step 2
Call your card's customer service department and ask for a reduction on your credit card interest rate. If your interest is currently very high, research other cards in advance so you can tell the customer service rep on the phone that you are thinking about switching to a different card because they offer a better deal. Even if you only get a small reduction, this will still save money on accrued interest and make it easier to pay off what you already owe.
Step 3
Find extra sources of income. If you're not already working full time, look for things that can fill out the gap, whether it means overtime, a second job or side jobs such as babysitting or dog walking. Sell items that you no longer use, such as sports equipment, electronics and collectibles. Use any extra money coming in to pay off your debt.
Step 4
Cut your expenses to the minimum. Any money saved should go toward paying your debt. The first things to eliminate are subscriptions and memberships to everything from newspaper to gyms. You can also switch to free-only entertainment. This means no movie theaters and no DVD purchases. Instead, borrow movies and books from the library, and attend free events organized by the city or park department where you live.
Step 5
If you have or can get a credit card with a lower interest rate, transfer the balance of your debt to this card. This only works if the interest rate is permanently lower. Some cards offer a zero percent interest rate for the first six months but then switch to a very high percentage. If you're not able to pay off your debt in the first six months, you might end up with a bigger problem.
Member Comments