Credit Card Debt Removal

Every day, people are inundated with credit card offers, and most Americans have at least one credit card in their wallets. This doesn't necessarily mean that credit cards are a good thing, however---it's much easier to get into credit card debt than it is to remove it. Needing a little help when it comes to digging out financially is normal. With the right strategies, you can get back on your feet.

Why Repayment Is Difficult

Unlike cash, a credit card still is accessible to the cardholder even if he goes over his credit limit. It is also quick and convenient to use a credit card, and for security reasons, many people prefer not to carry and use cash. Furthermore, as inflation continues, many people use credit cards to make ends meet when they lose their jobs, have fewer work hours than expected or don't have a high enough pay rate---that is, the economy sometimes makes people reliant on credit. It also is hard to stop using credit cards because using them makes it easy to establish a higher standard of living.

Benefits of Removing Credit Card Debt

Even though getting rid of credit card debt is hard, it has major benefits. Paying off your debt can raise your credit score. You also save money on interest. With your debt gone, you no longer have to worry about how you will repay and therefore may be less stressed. Lastly, the money you budget toward credit card payments can be reassigned as discretionary income you can use toward other purchases or savings. You'll still be able to buy at least up to your minimum payment amounts, but you won't be legally obligated to anyone else for what you spend.

How to Remove Your Credit Card Debt

Usually, the best plan for paying off credit cards is to attack the card with the highest interest rate first. List all your cards according to their interest rate. Then look at your budget to see if you can come up with a little more than the minimum for the card with the highest interest. Paying more on the minimum on the card with the highest interest quickly reduces the principal. For the cards that don't have the highest interest, stick to paying the original minimum payment you budgeted. Continue budgeting more than the minimum on each card until each card is paid off.

Other Alternatives

If paying down the cards in order of interest still isn't enough, call your card companies and ask for a lower interest. Some will give you one if you just ask. The next step is to write a hardship letter that explains your financial situation and asks for either forgiveness on some of the debt (debt settlement), a lower interest rate or a lower monthly payment. You also can transfer balances to other cards with better interest rates, consolidate your debt or use debt management plans. It's imperative to track the spending in your budget if you want to get debt under control. Whatever method you use, don't expect miracles overnight---it will take time to remove your debt.