If you have a growing amount of debt due to carrying high balances, paying high interest rates and being hit with fees, you may feel frustrated and exhausted. You may even feel that you have gotten yourself so far into debt that you may look toward declaring bankruptcy. Bankruptcy has deleterious long-term consequences to your credit profile, so try to solve your debt problems on your own, if at all possible.
Spend Less
You can stop the build up of credit card balances and debt by simply spending less. Review your purchases for the month and note how many times you dined out or went to a movie theater. You may also see you have a tendency to buy more apparel or electronics than you really need. Perhaps you could move to a new residence with lower rent. If you can curb your spending, you will go a long way in solving your overwhelming debt load.
Earn More
If you can find way to generate more income, you should have more cash to pay down your credit card balances. If you are employed full time, put together a brief presentation to your manager to see about getting a raise or participate in a bonus program based on reaching certain milestones. Take a second job during nights and weekends, freelancing or selling old items in your closet via online auction or consignment shop.
Pay Faster
When you are faced with high levels of debt, it can be easy to ignore your bills until the last minute. You may even find it more convenient to pay your bill on the payment due date rather than pay early. If you want to make major progress in paying down debt, start sending excess money as soon as possible rather than wait until the due date. It is better to make five separate $20 payments during the course of the month rather than wait until the payment due date to pay $100. Since most credit cards assess interest using your average daily balance, any amount you pay down today will not be assessed interest tomorrow. Over the course of several months, you may be able to save a great deal on interest charges and late fees.
Call Your Creditors
It may feel embarrassing, but a quick call to your creditors asking for a lower rate or asking if there are special promotions with lower interest rates can be very effective. Many card issuers will assist you and offer you a better rate rather than see you take your balances elsewhere or risk the balance going into default.
Credit Counseling
A third-party credit counseling service may be able to help you lower interest rates on your credit cards, stop fees and provide some guidance on how to better manage your finances. When you in enroll in a credit counseling program, your agency will work with your credit card issuers to obtain better interest rates. If successful, the agency will start taking a single monthly payment directly from you and distributing to your creditors. A downside is that the accounts you enroll will likely be closed, but if you are trying to reduce your debt, having your cards inactive can only help.
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