How to Eliminate Credit Card Debt Without Bankruptcy

Credit card debt can be frustrating, overwhelming and leave many consumers considering bankruptcy. Focusing on paying more towards principal and less on interest can assist in paying down credit cards faster. It's also important to address accounts in default or collection status. These actions won't just eliminate credit card debt over time; they'll also improve your credit rating.

Instructions

1

Contact your lender if credit card accounts are in default. Explain your circumstances, such as financial hardship or health issues. Ask the lender to set up a payment arrangement to repay missed payments and get caught up.

2

Handle collection issues. If your account has moved from default status into collections, ask your lender for the agency's contact information. Set up a repayment plan with the collection agency.

3

Make a list of your credit cards and review current statements for the interest rates to decide which credit cards to pay off first. Credit cards with the highest interest rate should be paid first. After the highest interest card is paid off, move on to the credit card with the next highest rate and so on.

4

Check out balance transfer offers. With balance transfer offers, you are charged a low interest rate for a set term, such as 12 months. During this time, the majority of your payment is applied to principal, which makes paying down credit card debt quicker.

5

Brainstorm ways to free up extra cash and pay down your debt sooner by re-evaluating your daily expenses. For example, eating lunch out daily could be adding over $100 to your monthly budget. Carpooling can save significant fuel expenses.