Pro Tips on How to Get Out Of Credit Card Debt
It is no secret that credit card debt is a problem. In fact, over 45% of Americans have a balance on their credit card, with the average person having $6,375 in credit card debt. If you have credit card debt, there are a few steps that you can take to help eliminate that debt quickly. Continue reading for expert tips on how to get out of credit card debt.
- Pay off the card with the highest interest rate first: Any extra cash you have each month should be used to pay off your credit card with the highest interest rate. You will still need to continue to pay the minimum balances on your other cards. Once you have paid off the card with the highest interest rate, apply those funds to the card with the next highest balance. Each time a card is paid off, it will give you additional money to pay on the next highest card.
- Do not continue to use your cards: The fastest way to eliminate debt on your credit cards is to stop using them. Instead, pay in cash. If you continue to use the cards while trying to pay them off, you are only sabotaging your efforts.
- Create a budget: Detail every penny that you spend and see if there is any extra that you can use to pay down the balance on your credit cards. Maybe you can downgrade your cable service, go out to eat less, or go a little easier on the air conditioner.
- Ask for a lower interest rate: Contact your credit card issuers and ask them for a lower interest rate. If you have been offered a lower rate card by a competing card, mention it to them.
- Make more than one minimum payment: Even making one extra minimum payment per month will decrease your average daily balance and lower the interest charges. This will result in you paying off your debts at a faster speed.
- Transfer balances: If you have a card that has a high-interest rate, you may consider transferring higher interest cards to one with a lower rate. This will allow you more time to pay without interest and spend more time focusing on other cards with higher rates.
- Consolidate debt. It may help you to consolidate your debts. This can be done through a private lender, bank, or peer-to-peer lender. Such a loan can be used to pay off all credit card debt at once and allow you to pay one larger payment each month.
- Do not close your cards. While you may be tempted to close each card after it has been paid off, this is not the best choice. Your credit score is partially by your ratio of credit utilization. This is based on the amount of credit you have versus the amount you are using. Closing a card will hurt this ratio but leaving a card open and paid off will improve your score.
Contact an Experienced Attorney Today
If you are uncertain what your best options may be for paying off your credit cards or other debt, the attorneys at Cornwell Law Firm can help. Contact us today to schedule a consultation.