Best Ways to Get Out of a Credit Card Debt
Friday, 03 July 2020

 Americans spend way more than they earn and use their credit card to make up for the difference. According to Experian, Credit card is the fastest growing debt in the U.S after personal loans. It's an easy way to spend money the way they want it and pay it back in easy monthly installments from their monthly pay. They get what they want, and the monthly payment doesn't pinch them either.

 It sounds like a win-win, but it isn’t.  

They only realize it when faced with a difficult situation like a job loss or a medical illness. Sadly becoming debt-free is the only way to come out of the case, but it is far from easy. Debt settlement requires a hands-on approach and can take months or even years.

Here are some suggested ways to come out of it:-

Pay More than the Minimum Every Month

One of the best ways to come out of debt faster is to pay more than the minimum amount every month towards your credit card. It requires a lot of financial discipline. Depending on your monthly income and the total credit card debt, set aside a fixed amount that you can pay towards your credit card to settle it faster. Make the payment diligently and take care not to miss due dates after all banks make money off the interest charges you pay.

Debt Snowball Method 

 If you have different loans on your head, you could try the debt snowball method. Take stock of all your debts and tackle them one by one. Start with the smallest one. Once that's settled, move on to the next one. Make your way up in ascending order. You'll gradually find yourself making bigger and bigger payments, ultimately eliminating your debt. Or you could also start with the most significant debt first, whichever way you’re comfortable.

Negotiate Payment Term 

Another way to go about debt settlement is by reaching out to your bank or credit institution to negotiate payment terms. You could request for lower interest or APR. Explain your situation to them. You never know they may be willing to help you out, especially if you've been their long-term client with a good track record.

Debt Relief Measures

If the amount you owe is higher than what you can pay each month and you are neck-deep in debt, you might consider some serious debt relief measures. There are measures like a debt management plan wherein you can seek help from a third party to negotiate terms with your creditor. 

You could opt for a debt settlement wherein the creditor agrees to accept a one-time payment of a lesser amount and close the debt. Lastly, when all else fails, you could declare bankruptcy where all your unsecured debts like a credit card, personal loans, etc. are wiped off. However, it might leave a mark on your credit score.

No one wants to live a life drowned in debt. Although challenging, a debt-free future is possible. There is a way out of every type of debt. You have to make up your mind, create a plan, and stick to it.
      

 

 
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