Unsecured Credit Card Debt Help

Credit card debt is a type of unsecured debt, and owing huge balances can have a negative impact on your personal credit rating. You have methods to help eliminate this type of debt, and controlling credit card debt entails controlling your spending habits and managing debt wisely. Rather than paying down credit card balances over the course of many years, learn how to get rid of this unsecured debt sooner.

Discontinue Use of Credit Cards

If you repeatedly use credit cards for everyday purchases and living expenses, this will keep you deep in debt. Use a credit card only as a last resort, and use cash for the majority of your purchases. Change your way of spending, and only buy what you can afford. Keep credit cards at home, or shred the cards to alleviate unnecessary spending.

Interest Rates

The lower the interest rate on your credit cards, the easier it is to pay down the balances. Creditors will ask for a minimum payment, which is often only just enough to cover the new interest charges for the month. When your interest rate is too high, it is difficult for you to pay more than the minimum payment and you remain in debt. Transfer your high-rate credit card balances to a credit card with a lower interest rate, or talk to creditors and discuss lowering your interest rate to help you pay down the principal.

Increase Monthly Payments

A lower interest rate on your card should lower your minimum payment. If you pay more than the minimum every month, this will put a significant dent in your outstanding balances and help resolve the unsecured debt more quickly. If you double or triple the requested minimum every month, this will pay down the new interest charges plus some of the principal. You will pay off the debt in less time than if you only pay the minimum.

Debt Consolidation

Debt consolidation works because this method usually results in better interest rates on unsecured debt. If you combine all of your outstanding balances into one bill, you only have to concern yourself with one creditor every month. Fixed terms let you pay off the debt in a specified number of years. Most consolidation loans require collateral such as home equity or a vehicle title.

Debt Relief Programs

Request help from professional debt counselors or debt relief programs, if you are unable to pay off unsecured credit card debt on your own. Many non-profit debt relief programs do not charge monthly service fees. Once you enroll in a program, most programs require that you close all of your credit card accounts and agree not to apply for additional credit while you participate in the program. A trained counselor will work with your creditors to get your interest rates reduced and payments lowered. Some debt relief programs allow you to consolidate your payments into one monthly payment. Debt relief programs also provide education on how to wisely manage debt and credit.