Options for Repaying Credit Card Debt

Credit card debt can seem overwhelming. If not handled properly, it can grow out of control until your credit score and personal finances are in jeopardy. Using your credit payment options wisely can help save your household money on your credit debt, according to online financial resource Investopedia. Investigate the many options available for repaying credit card debt.

Contact Your Creditors

If you are having difficulty repaying your credit card debt, then one of the places you will want to call is your credit card company, according to "The New York Times." If you explain your situation to the credit card company and ask for assistance, they may be able to put you on a plan that will reduce your debt and give you a monthly payment you can afford. This could cause your credit limit to drop and constrain the way you use your credit card, "The Times" reports. But a credit repayment plan from your credit card company can be an efficient way to repay your credit card debt.

Consolidation

The Federal Trade Commission (FTC) recommends looking in to debt consolidation as an option for repaying credit card debt. Consolidation is when you bring all of your high-interest credit card debt under one loan. You can do consolidation yourself by using a personal loan, a home equity loan, a home equity line of credit or a balance transfer to a new credit account with a lower interest rate. The primary difference between a home equity line of credit and a home equity loan is that the line of credit interest rates tend to be higher. Be sure to read all of the terms of a balance transfer credit account before making the move. Check to see what the interest rate can go up to on a transferred balance. If that interest rate is higher than your current rates, then do not make the transfer.

If you would prefer to have some help with your debt consolidation, you can consult a financial planner, an associate at your bank or credit union or a debt consolidation firm. Conduct personal interviews with all the financial professionals you are considering, and select the one with the qualifications and experience that make you feel confident.

Personal Budget

Debt negotiation and consolidation are measures that require restructuring of your debt in one form or another. You may be able to take care of your credit card debt on your own, according to the FTC. Paying down your existing accounts can help build your credit score, and it can also help you feel like you have your debt under control. Gather your credit card bills together and prioritize the ones you would like to pay off first. A good rule of thumb is to start with the accounts with the highest interest rates. Apply extra cash to those accounts each month until they are paid down, and then move on to the next ones on your list. Do not close your accounts, as having credit accounts with a long history can help improve your credit. Once you have your accounts paid down, limit your spending on them to only that amount that you can pay off each month.