How to Get Out of Debt & Talk to Credit Card Companies

Credit card debt can appear to be an endless cycle that can be difficult to escape. With careful planning, organization and negotiation skills you can get out of debt and properly handle issues with your credit card company. Getting out of debt can be a lengthy process but persistence guarantees results.

Instructions

1

Gather all your debt to assess how much you owe. You can either gather your credit card bills or you can obtain your credit report from all three credit bureaus. The quickest way to get your credit report is by going to Experian.com, Equifax.com and Transunion.com. You are entitled to a free credit report each year or if you are denied credit for any reason.

2

Determine the total balance of each debt and write it down. You will find this information on your credit report or under the balance of your credit card statements.

3

Arrange your balances from the lowest owed to the highest. Next to each balance, list the interest rate. Also write down the minimum payment for each account.

4

Call the credit card companies that have the highest interest rate and negotiate with the representatives to see if you can have a lower rate. You can inform the representative that you have been with them for quite some time and you deserve a lower rate. Also mention your diligent payment history as a means of having your interest rate lowered, or inform them that you got an offer from another credit card company offering a cheaper interest rate and you are considering switching. If the initial representative you speak with is not willing to negotiate, call back periodically to find a representative that is willing to help you.

5

Take the lowest balance and begin to pay it down. This method is referred to as the "debt snowball plan," suggested by Dave Ramsey in his book, "The Total Money Makeover." Pay off the smallest balance first by adding as much extra income as possible. Once you pay off the small balance, move up to the next balance using the same amount of money that you used to pay off the initial balance. Keep performing this task until all your balances are paid. Many people have gotten out of debt within two to five years, according to Ramsey.

6

Keep a record of your progress. Starting with smaller amounts and paying them off is more motivating than taking a long time to pay the larger amounts first, so keeping a record of your progress will keep you on the program.