In recent years, the amount of credit card debt being carried by
Americans has reached hundreds of billions of dollars, with
interest payments each year that would sink the economies of
many small nations. But you can eliminate your credit card debt
forever, even if everyone around is stuck in an endless cycle of
debt slavery. How? Read on, dear internet friend.
STEP 1: CONSOLIDATE YOUR DEBT.If you have any more than one
credit card with a debt due to be repaid, then you're a
candidate for credit card debt consolidation. The 'minimum
monthly' payment each month includes many variable, including
the interest rate, the minimum monthly base (usually around $25
per month of a few percent of the debt, whatever is higher), and
any 'fees' you've been charged through the month for things such
as using an ATM, writing a check on your card, or, if you deal
with companies like MBNA, breathing. To consolidate that debt,
simply go to your bank and ask them about a debt consolidation
loan. The interest rate will be far lower than the 9% to 29%
that credit card companies can charge, and the repayment
schedule will be far clearer of the hidden extras (such as
insurance) that credit card sharks will hit you with.
STEP 2: CLEAN UP YOUR CREDIT HISTORY.Some people, many of us in
fact, will let the occasional credit card payment slip by late,
or even miss it all together, if things are a little tight each
month. The problem with that is that it sits on your credit card
report for the next seven years whenever you do that. So part of
eliminating your credit card debt is to ensure that your credit
score is clean and healthy. Some people will borrow a small
amount from a bank and set up their account to automatically
repay it each month, which will cost you not a lot in interest,
but will make your credit report look much better in twelve
months time. Others will just get ruthless with their repayments
- pay a little bit extra than the minimum, pay it on time every
time, and call the credit card company and ask them to REDUCE
their spending limit whenever the debt goes down by a thousand
dollars. The card companies don't particularly like doing that,
but they will, and it will help you get a better record when
you're not tempted to respend.
STEP 3: IF YOU MUST MISS A PAYMENT - TELL THEM.Contrary to what
you might think, missing a payment is not considered nearly as
bad by a credit card organization if you just call them and let
them know you're running a bit tight this month. Most companies
just want to know you're not stiffing them, so will gladly waive
a late payment fee, or even allow you to schedule part payments,
just as long as you're dealing with them in good faith. And part
of eliminating your credit card debt is to deal with these
people in the best faith possible.
STEP 4: START USING CASH.It really isn't that hard to use cash.
Sure, you end up carrying money that you probably feel
uncomfortable carting around, but is carting around a credit
card with a $5,000 limit really that much safer?
STEP 5: REPAY AS YOU SPEND.It's not something that is advertised
by credit card companies, but most of the time you only pay
interest on what you owe when the company prints off your
monthly statement. That means, if you spent $100 on the 1st of
the month and put it on your Visa or Mastercard, and you paid
that $100 back with a check to the card company on the 10th, and
they send out your statement on the 20th - you have no debt, and
thus, no interest. For those wanting to eliminate credit card
debt, this is an incredible opportunity to get the convenience
of a credit card, without paying any interest AT ALL. In fact,
if you're prompt with your payments, don't spend on big ticket
items that will take months to pay off, and you keep your
balance down to next to nothing, you can save literally
thousands of dollars every year. Remember - repay before
statement day. It's the best way to eliminate credit card debt
before it even happens.
About the author:
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