Credit Card Debt Solutions to Eliminate Your Debt

Credit card debt with high interest rates can be difficult to manage and can cause problems in your budget. As the minimum payments increase, your cash flow or disposable money decreases and this situation will make it increasingly difficult to cover your monthly expenses, start living from check to check (week to week) and you will have to juggle the bills to pay, that is, to stop paying some to pay others to stay afloat. This situation is very stressful and exhausting, but there are a variety of solutions you can use to regain control of your personal finances.

The option you actually use will depend on your own financial situation, the amount of debt you have to eliminate and your credit score. Choosing the right solution can restore your budget balance and help you avoid additional credit losses and damages. On the other hand, the wrong solution can put you in an even more disadvantageous situation for you.

Wide Range of Solutions

Debt Consolidation Program

Debt consolidation programs are an assisted form of debt consolidation. You work with a certified nonprofit credit counseling agency to establish a payment plan that works for your budget. The program consolidates your debts into a single monthly payment with reduced or totally eliminated interest charges.

Negotiation of the Interest Rate

If the charges with having a high interest in your cards are so significant that they prevent you from reducing credit card debt, negotiating with your creditors to get lower rates can provide you with the advantage you need to eliminate your debt. If your interest rate goes down, a higher proportion of each payment will go to eliminate the principal of your debt. Read tips on how to negotiate effectively.

Debt Reduction Strategies

In some cases, you may be able to adjust your budget to eliminate your excessive debt burden on your own without any special tools. Learn how to set your budget to get a fast track for eliminating your debt. Compare two proven methods for debt reduction, to see if any of them may be right for you.

Credit Card Balance Transfer

This is a type of debt consolidation in which you transfer the balances of your existing cards to a credit card that has a 0% Annual Interest Rate (APR). This means that for a period - usually 12 to 24 months - 100% of each payment you make is going to pay off your debt (the principal). This can be an effective method of elimination if you have $ 5,000 or less in credit card debt.

Consolidation of Personal Debts

A personal debt consolidation loan provides funds that you can use to pay off all of your credit card balances, leaving you only the loan to pay. Loans tend to have interest rates much lower than 10% or lower, if you have the proper credit score, so you can minimize the interest charges and get your debt in a more manageable fixed payment schedule. With the right terms, you can get out of debt in less than five years.

Credit Counseling

Credit counseling is a free service that can help you focus efficiently on the proper debt solution according to your needs. A certified credit counselor can help you assess your situation to identify the right solution that meets your needs and goals. If you are eligible for a debt management program, they can also help you enroll directly, but are required to review all options so you can get the perspective of an impartial expert, without any obligation on your part.

Debt Management Program

This is a form of assisted debt consolidation, which works very well if you have a large volume of debt and a less than perfect credit score. You enroll in a program through a credit counseling agency, who will develop a payment plan that works for your budget. Then negotiate with your creditors on your behalf, to reduce your interest rates. The total monthly payments are normally reduced by 30-50%, and most people complete the program within 60 payments or less.

Debt Settlement

This really should only be explored as a last resort for debt relief, before filing a bankruptcy filing. If you have tried all other options without success, then you can consider a debt settlement plan in which you can settle your debts for an amount less than the total amount owed. This can cause significant damage to your credit score and the results may vary, but it may be your best option if your situation is really critical.