Posts Tagged ‘credit card debt solution’

The Best Credit Card Debt Solution – A 3-Step Strategy

If you are looking for the best credit card debt solution, you have finally come to the right place. However, if you are looking for a magic wand that can eliminate all your debts within a day or two, you will be disappointed. It takes time for debts to pile up and it will not go away overnight. The process requires you to follow a very careful approach. You must work on the right strategies. The most important thing is that you will have to be very consistent in your efforts. The problem with credit card debts is that they grow very fast because of the high rate of interest that is charged on it. Before you realize it, the situation becomes out of your control. However, it is very important for you to understand that when it comes to regulating your debts, the best time is ‘now’. Yes, there is never too late when it comes to getting your finances back on track. Even if you are feeling helpless, the chances are that there are still plenty of options available out there for you that can help you regain control of the situation. Following is a brief rundown on the three steps that you can take in this regard.

Negotiate A Lower Rate

The best credit card debt solution is to negotiate a lower rate of interest with the creditor because the high interest rate is the main reason why the debts are piling up so fast. However, in order to be in a position to negotiate, you will first have to make sure that your accounts are in good standing. If you have never missed payments or made late payments (even though you always made just the minimum required monthly payments), you are in a strong position. However, if you have a poor payment history, you should first try to get current with your payments and wait for a couple of months before proceeding in this direction. You should also consider implementing strategies to reduce the credit utilization rate, as this way, you will be able to boost your credit score significantly within a matter of just a couple of months. You can reduce the credit utilization rate by reducing the total outstanding amount of debt (you will have to arrange some extra cash to pay off your debts faster, such as by budgeting or by getting a second job). Once you have a decent credit score and a good payment history (for at least the last six months), you can give a call to your creditor and request them to reduce the rate. Tell them that you have a better credit score now and your payment history is also good; if they do not lower the rate, you will have to consider transferring your balance to another credit card where you are being offered a much lower rate. Such negotiation strategies often work because the credit card market is a very competitive one and no one wants to lose customers.

Consider Balance Transfer

If the above strategy does not sound to be the best credit card debt solution for your case, you should consider going for the balance transfer game. However, you have to be very careful while you do this. Many companies offer a very low rate, but only as a part of an introductory offer. The rates usually increase significantly after the introductory period is over. Therefore, make sure you read the fine prints thoroughly before you sign it. However, a good deal in balance transfer is again available to only those who have a decent credit score. But, even if your credit score is not that decent, you can still consider this option. Since the market is highly competitive, you may be lucky enough to find another company that is willing to offer you a credit card at a comparatively much lower rate. Make sure that no further interests are charged on the balance that you are transferring from the old card.

Pay More Than Just The Minimum Required Payment

If you are using the above strategy as the best credit card debt solution for your case, you will have to be financially disciplined once you transfer the balance to a new card. Avoid making late payments and make sure you pay the monthly balances in full. If you are making just the minimum required payments, the debts will start accumulating again, and this time, you will be in a more serious trouble. Work on to improve your budgeting strategies. Reduce your expenses to as low as possible; if that means practicing a frugal life, go for it. You can also consider getting a second job or working overtime to get the extra money needed to pay off your debts faster.

Overall, if you have a strong self determination, you can easily work out the best credit card debt solution for your situation. You just have to be consistent and financially disciplined in whatever strategies you choose to follow.

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