Discover 5 possible options for eliminating credit card debt.
Credit card debt can quickly become overwhelming due to the high interest rates involved. Fortunately, you do not have to just live with credit card debt forever. You can eliminate your debts with the right strategy. Here are 5 possible options.
Make a Budget
If your credit card debt is worrisome but not yet overwhelming, and you have a steady income that is adequate to your needs, you may be able to get out of debt simply by creating a budget and sticking to it. Cut out your luxuries and direct that cash towards your credit card balance. For this strategy to work you must be committed to sticking to your budget and not making any new purchases on your cards.
Consolidate Your Cards
If you still have decent credit, you may find yourself getting new card offers that promise 0% interest for an introductory period. Transferring your existing balances to such a card can be an excellent strategy for cutting down your credit card debt. If you can’t open a new card with a 0% interest rate, consider consolidating as much of your debts as possible onto whichever card has the lowest interest rate. This will enable you to reduce the rate at which your debt will grow while you attempt to repay it.
Try Credit Counseling
Another possible way to get a break from high interest rates on credit card debts is to enroll in a credit counseling program. This might be a good strategy if the credit counseling agency is able to convince the credit card companies to reduce your rate enough that you will be able to pay off the debt within 5 years.
Work Out a Debt Settlement
If your credit card debt has already gone into collections, you should consider working out a debt settlement with the collection agency. Remember, collection agencies purchase debts at huge discounts, so they do not really need you to repay the entire amount to make a profit. If you can repay between 30 and 50 percent of the balance within a year or two, the collection agency will probably be happy.
File Chapter 7 Bankruptcy
One final option for getting out of credit card debt is to file for Chapter 7 bankruptcy. This proceeding will completely wipe out your unsecured debts (including credit card debts). If you meet the income limit, you can typically complete a Chapter 7 bankruptcy without liquefying your personal assets. If you decide to pursue bankruptcy, be sure to hire a bankruptcy attorney to help you.
