Credit Card Debt

These 5 Myths will Astonish you about Settling Credit Card Debt

These 5 Myths will Astonish you about Settling Credit Card Debt

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Credit card debt in the UK today totals to £72.6 billion – blighting the lives of all too many UK consumers. With the typical credit card interest rate being 18.5%, it’s perhaps unsurprising that the average household is caught in the grip of £2,668 worth of credit card debt.

With more people seeking credit card debt solutions than ever before, we want to demystify five credit card debt myths that many believe to be true.

Credit card debt solution myth one: Debt settlement won’t impact your credit score

Making ‘full and final debt settlement’ offers to your credit card creditors can write off a set amount of your debt(generally speaking creditors are known to accept offers of between 50 and 75%). However, debt settlement can negatively impact your credit score, because it marks your accounts with ‘P’ on your credit history (which stands for partially settled).

This debt solution won’t ‘wipe off’ any past defaults either (e.g. the times when you’ve missed a credit repayment or were late in paying).

However, it’s worth noting at this point that many other debt solutions can also affect your credit rating, which may make a fall in your credit score unavoidable.

Credit card debt solution myth two: You must pay a debt agency to settle your credit card debt

There are many options of debt solutions for dealing with your credit card debt, one of which involves using a debt agency. While some unscrupulous businesses present false information for convincing you that there’s no other option, the fact is that there’s never a situation where you must use a debt agency. That said, there are multiple benefits of debt intermediaries, such as there being able to advise you on your options from a debt expert’s viewpoint and negotiating with your credit card company on your behalf.

Credit card debt solution myth three: You should focus on paying your credit card over your other debts

Credit card debt is not a ‘priority debt’. If you have debts that fall into any of the following categories, with only a limited amount of money to be used on your repayments, you should pay these first and foremost (but you should regularly update all creditors as to your circumstances):

Credit card debt solution myth four: Anyone can choose a debt settlement for their credit card debt

To qualify for debt settlement, you need to be considered as being in hardship (e.g. your creditor won’t accept a cut-price offer for a credit card debt on which you’ve kept up with your repayments).

Credit card debt solution myth five: If you have a large credit debt, you only have the options of debt settlement or bankruptcy

There are many debt solutions available that can deal with problem credit card debt, and you should always explore all of your options before deciding what to do next. Possible credit card debt settlement solutions may include:

  • An Individual Voluntary Arrangement (IVA) – A form of debt settlement that allows you to repay your debts over a period of up to 6 years. This type of debt settlement will ensure interest and extra charges are frozen, while a debt agency acts as the negotiator between you and your creditors.
  • A Debt Management Plan (DMP) – A debt solution that arranges a repayment schedule for non-priority debts (such as overdrafts and credit cards).
  • An Administration Order – A debt settlement solution for those with: two or more debts; a total debt of less than £5,000 and a minimum of one County Court judgment.

We are National Debt Help. We help those who are struggling with debt.

Our debt advisors help you understand whether an IVA debt solution could pave your way to finally becoming debt-free.


What to Do If Your Prepaid Card is Stolen

Card security

One of the most important financial management resources that we use today is the debit card. Essentially plastic money, it allows us to buy goods and services online and offline as well. The debit card is also known as a prepaid card. This is because it allows us to spend money that is already loaded into the card through an account. One of its most beneficial functions is that it can only be used to spend what we already have. Furthermore, it provides security since we don’t have to carry cash around with us. Unfortunately, it is a light and portable item that can be stolen. Whoever takes your debit card can begin to use your money if they figure out your password or PIN number. Hence, it is very important to take measures upon discovering that your prepaid card has been stolen. Here is what you can do in this instance.

  • Contact your prepaid card provider immediately

The first activity that you need to do is to contact the provider of the card. It is important to ensure that you report the loss of your prepaid card as fast as possible. This is so as to get it flagged and blocked reducing the chances of the thief spending your money. Taking this step also gives you an opportunity to recover all or part of the money that could already have been spent. Some financial institutions offer a special fee reimbursement on specific cases of loss. For example, if the prepaid card is lost as a result of interacting with the institution’s infrastructure. Furthermore, there are some protective measures applied on your bank account upon reporting that your prepaid card is stolen.

  • Request for a new prepaid card

Thanks to its portability and versatile nature, the prepaid card is an important element of modern personal finance. Therefore, if you lose yours, you need to get a new one. Hence, request for one with the card provider of your old card. They will provide you with a new one containing a 16-digit card number. Some financial institutions will even offer to provide you with the new card more rapidly through an expedited delivery system. While ordering a new card, it is important to enquire about any courier charges that could apply. In addition to that, ensure to activate the new card as quickly as possible so as to resume your normal financial life.

  • Update your billers

To promote convenience, some of us have programmed our prepaid cards such that bills are deducted directly from the underlying accounts automatically. This link is performed using the account number. Seeing as the new prepaid card will have a new bank account number, it is important to update your billers about it. This is so as to prevent bounced bills and general disorder. While doing so, update your contact information as well. This will help them to get in touch with you as fast as required for any clarification.

A prepaid card is a very important part of modern financial living. Losing it can not only put your money at risk, it also creates inconvenience in your life. Should this unfortunate incident happen to you, the tips above can help you to get back on track as quickly as possible.


5 Easy Tips to Get Out of Credit Card Debt Fast

There are a few good things that you may have wished to do in life, but you can’t achieve these wants due to your debt. When you’re paying a certain portion of your income towards meeting interests, it actually affects your peace of mind.

Few good methods that all debtors must follow:

Use the snowball method

The snowball method is a method that you can use to cope with your debt by dealing with a credit card that depicts the lowest balance first. Just like a snowball gets bigger as it rolls, this debt repayment method is about meeting the lowest balance first and then attacking the next higher balance. It gives you a lot of confidence as you set yourself free from one debt to another. Paying off each bigger balance will continue adding more to your confidence level till the time you get debt free.

Automate your payments

Do you count upon every little earning? By setting up your account, you may allow your credit card dues to be debited from a bank account automatically. Then you may consider as if the money was never yours. By choosing to meet your credit card balance manually, you may consider repaying only the minimum balance in order to make way for your other prioritized expenses. You might feel as if you didn’t ever have any extra money once your credit card payments get automated. It’s in your best interest to repay the entire balance every month instead of bearing extra charges.

Track all expenses

A lot of people that require free money tend to consider credit cards as an option. They find it much easier to swipe a plastic card and then put their signature over it. Things change the sooner the billing statement comes. Then, you find yourself looking around your home for extra cash to meet your dues. You may consider setting an individual category for your credit card expenses. You may track your expenses and check where your funds are moving. You won’t find it tough to understand how you’ve used your credit card and racked up in purchases. By keeping a track of your expenses, you’ll be able to keep all of your debt at bay.

Opt for balance transfers

A number of banks can help you by consolidating all credit card debts into a single debt. To achieve the very best of balance transfers, get all of your balances transferred from a single account with a higher rate of interest to another with the minimum rate. You’ll end up saving a much higher amount. You must understand the fact that there’s nothing as free money. The credit card interest rates will remind you of the high-interest rates.

Use a portion of your savings

Creating a fund for handling emergencies lays the foundation of personal finance. An electronic fund will certainly help you meet your emergency expenses beyond everything. You may set a lump sum payment of a portion of this emergency fund when you have some investments, a partner that earns a successful living, a steady flow of income or when the emergency fund yields other benefits.

Achieve your financial freedom

You’re bound to enjoy a stress-free life the sooner you achieve zero debt. You’ll be using a certain portion of your money towards paying off debt. But once you’ve paid a card back in full, you can use that money towards enjoying a short trip along with your loved ones. Alternatively, you may even let that money grow by investing it somewhere and use it later for achieving other financial goals like that of making the down payment for your new house.

You’ll regain that life free of financial worries once you’ve succeeded in paying off all of your credit cards subsequently.

 


Credit card debt at a scary level – Things card companies won’t let you know

Credit card debt

Image source: pixabay

Recent reports suggest that American consumers have recently hit an indeed scary milestone. As per reports released by the Federal Reserve, they have the highest outstanding debt, mostly in the form of credit card debt as ever seen in the history of America. In the month of June, 2017, Americans owed $1.022 trillion in revolving debt and this figure even beats the record set in 2008 April when consumers owed a collective amount of $1.02 trillion in revolving credit. This record serves as a warning signal for Americans to focus on credit card debt. Even when you feel the debt is manageable; know that there could be a sudden emergency which can keep you away from real mess.

So, what are the few things that the credit card companies don’t let you know so that you fall deeper into the vicious cycle of debt? If you don’t want to deceive yourself and fall prey to few emergencies, you should know the different things that the credit card companies don’t want you to know. Here are few points that you should know.

#1: There’s no such government law which sets an APR

While your credit card can have a maximum interest rate which is mentioned in the place of ‘terms and conditions’, there isn’t any legal cap actually. There are various states which have usury laws which regulate the loan interest rates but they are only applicable to the banks within the state. This is why the biggest credit card companies are imbibed in North Dakota, Delaware, which are the 2 places where there aren’t any usury laws.

#2: Fixed interest rates aren’t always fixed

Even if you make timely payments, the fixed interest on the credit card can be increased any time when the company feels like doing it. The card issuers only require giving a 15 days notice about the change of rate. Hence you should always go through any correspondence from a credit card company if you want to avoid any harmful surprise.

#3: Being late on 1 card could raise the APR on all cards

If you could just end up in 1 late payment, you could incur a penalty rate on all your cards, even though you may have been timely while paying the balances on the other cards. So you should monitor all your accounts and remember the due dates of each of the cards so that you don’t make a single late payment. You will most likely be stuck with the high APR for few more months, but as per the CARD Act, issuers of credit card should reconsider the penalty of a cardholder post 6 months.

#4: Paying off your balance early hurts your credit, is a myth

This is one of the most famous myths and if you maintain a balance on your card, this wouldn’t even improve your credit score. In fact, if the balance is pretty high, this could actually hurt your score. Your first priority should be paying on time and then you should focus on interest payments, late payments and damage to credit.

Therefore, if you’re wondering about the different ways in which you can stay out of debt, first know about the things that the credit card company doesn’t want to let you know. Just make sure you take steps accordingly.

 


Alleviate your energy costs even when the mercury is climbing high

As we know that our most dreaded season is arriving and the mercury has already started climbing high as we bid goodbye to winter. Since the clichés are always out with the coming of summer, there’s a sharp rise in the water and electricity bills. People are generally all drowning in some kind of debt, whether credit card debt or personal loan debt, home loan debt, auto loan debt or student loan debt. Amidst the financial crunch that they’re already going through, it is tough for them to manage payments if their utility bills go up. Hence, if you’re feeling obsessed about maintaining low electricity and water bills without having to switch off your AC and give up your sprinkler, here are few tips that you need to know.

#1: Check the thermostat of the hot water heater

Get your water heater and keep the thermostat to 120 degrees, which is a statewide initiative that has been developed to boost electric energy efficiency and conservation. As the water heaters are manufactured, they have the default setting of 140 degrees Fahrenheit but it has been stated by the Department of Energy that 120 degrees is sufficient for all kinds of water heating requirements which you need throughout the year.

#2: Locate leaks and fix them immediately

Another good idea to check out is to repair leaking faucets, pipes, toilets and also a leaking roof. Apart from eyeballing your sink, one of the best and surefire ways of watching out for leaks is to check your water meter both before and after a 2-hour period when there’s no water being used in your home. If you find the meter changing, you would know that there’s a leak somewhere. Start finding out and repair your leaks.

#3: Use something smaller than the oven to cook

Do you have a stove at home? If answered yes, you must have bought it for some specific reason. You should be aware of the fact that every time you use an electric skillet, toaster oven, slow cooker or a microwave, you will definitely consume less energy and this will in turn help you save on utility bills.

#4: Turn off ceiling fans when you’re not at home

This is applicable only when you’re not at home. Don’t think that ceiling fans cool your home as what they do is to circulate air in order to make the rooms feel cooler. So, whenever you’re at home, switch on your fans but when you’re not inside, make sure the blades are not spinning as this unnecessarily adds on to the electricity bill.

#5: Check the temperature of your freezer and refrigerator

Remember that the ideal temperature of the refrigerator is 37 and 40 degrees and the ideal freezer should read 5 degrees. If there’s anything colder than that, know that you’re wasting money. Keep it at the right temperature so as to make it function properly.

When the entire world is contributing their bit to save the environment and adopt the ‘green’ approach, why would you be left behind to reduce your carbon imprint on the society?

Image source: https://pixabay.com/en/credit-card-payment-credit-card-1730085/

 


Clever Tools To Help You In The Fight Against Bad Debt

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Bad debts can be incredibly harmful and impact your life in a multitude of different ways. You will find borrowing money becomes impossible, or, at the very least, extremely expensive. It will be tough to get simple things like a smartphone contract, and you might even struggle to pass a landlord’s credit check if you need to rent a house.

And more employers than ever before are starting to use credit checks in the hiring process – so your bad debts might even restrict your ability to work.

As you can see, bad debts can literally ruin your life – so you need to work fast – and hard – to make things right. With this in mind, here are few excellent tools that can help you get your finances back on track.

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Credit reference agencies

Credit reference companies such as Experian and Equifax hold a lot of information about your financial history, and lenders, retailers, landlords and even utility companies will often use them before offering you credit. And, if you have bad debts, it will impact your score – meaning you may not be able to borrow money, get a mortgage, or rent a property. So, you have to make sure that you know your current position by signing up to one of the services and checking your credit report. Highlight all debts that are causing you problems and ensure that you target these first when you start thinking about repayments.

Online money managers

There are plenty of money management tools out there which can help you organise your finances – which is critical if you want to tackle your debts. Services such as 7 Days, 7 Ways and YNAB will help you track every penny you are spending and work out what you owe, where your spending priorities should be and offer advice on boosting your income.

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PPI checkers

If you have ever owned a credit card in the past decade or so, there is a good chance that you will have been charged payment protection insurance – or PPI. Plenty of people have been mis-sold PPI, and in many cases, you can claim it back from the banks. So, find out how a PPI refund is calculated, and do some quick maths to get an estimate of what you are owed. Apply for compensation if you have believe you have been mis-sold, and if you receive a lump sum, you can put that towards your debts. Bear in mind that if you have credit card debt, there is a good chance that PPI payments will make up a substantial proportion of that debt – so your compensation might reduce your overall debt by a significant amount.

Bill Alert tools

When you need to pay off a lot of bills, tracking when they are due can get complicated. However, it’s something you must do if you want to keep lenders happy and improve your credit score. The good news is that tools such as Finovera and many others can help make it easier for you to deal with your bills from one place. So, when due dates come, you get an alert sent to you so that you can avoid all the associated charges that accompany missing payments.

Any more tools to add? Let us know about them in the comments section below.

 


Best ways to achieve credit card relief – Know more

For a household it’s not good to share credit card burden. Credit card debt can be repaid or lessened in a number of ways. A few methods will demand more effort and time than the common ones. In comparison, you may come across methods that don’t seem effective as repayment options; these methods tend to be a little riskier.

A borrower needs to study his specific financial situation and whether his chosen debt repayment method is ideal for his situation. Only then he will be able to opt for a successful debt repayment plan. This article throws some light upon the most advertised repayment methods besides the usual ways of lowering one’s credit card debt.bigstock-Debt-Relief-Just-Ahead-Green-22963049-e1368042855375

Once a borrower is able to study his financial situation carefully, he’ll soon be able to identify expenses that he can actually do without. It will surely help him develop a budget so that he may pay off his debt in a systematic way. Although things won’t change overnight, but with time he will be able to save more out of his income. A borrower needs discipline, patience and time to acquire

Under such circumstances you’ll need to follow a different path. You may need to opt for a credit card relief program. Such a program mostly involves indulging in a repayment plan.

A credit card relief program is a repayment plan between a credit card company and the borrower. Depending on your credit card interest and balances, you’ll be offered repayment plans. Then there are other factors like your expenses and incomes that affect your repayment terms.

An effective credit card relief program makes it necessary for you to remember the following points

Guaranteed Debt Relief

There are situations wherein you’ll be able to settle your debt for a lower amount or lower the interest rate through negotiation with the creditor. Credit card companies are usually not willing to negotiate interest rates with their borrowers unless they are payment defaulters. They will only accept a settlement offer if they’re certain that the settlement will yield more returns than what they would get after filing a lawsuit. Entering into a credit card debt relief program helps a borrower as these services involve experts that are experienced in negotiating with creditors and achieving the best deal.

Free Credit Analysis

The credit counselors associated with credit card debt relief programs will offer a credit analysis for free. They will evaluate your expenses and incomes for each month and decide on a monthly payment for you. It is a single amount that you ought to pay them based on your ability. Once you make your monthly payments, they will pay a certain amount to each of your creditors after deducting a small fee as their processing charge. You’ll soon see your balances getting reduced or your interest rates falling after you enroll with these programs.

Seek Your Consumer Rights Advantage

The Fair Debt Collecting Practices Act strictly forbids consumer debt collection through abusive means. Under this act debt information needs to get validated for ensuring its accuracy, showing a disputing option to consumers and to improve the collection methods. Business of debt collection can now be conducted as per the guidelines set by this act.

Stop Collection Calls

A collection agency can’t call you anytime they wish. They have to follow the FDCPA guidelines alongside the FTC norms. The collections agencies can’t call you beyond the business hours and they can call you at work. They can’t share your financial status with any other person. Once you’ve enrolled with a credit card relief program you may always ask them to confront your credit counseling team. You’ll no longer have to handle their calls by yourself.

Get out of debt now, repair your credit and opt out of bankruptcy

Under circumstances when you undergo serious financial crisis, you don’t much time to consider the paths that lie ahead. Whatever you do, you shouldn’t consider filing for bankruptcy since it will hit your credit score and the effect will be shown in your credit report. It will haunt your finances for 10 long years.

It takes a long time for someone to improve his credit. Your credit score can actually be improved only when your credit history is rebuilt. Your credit score is affected by every delinquency that is reported. Your credit history will determine how much time it will take for these negative instances to be removed from your credit report.


How Credit Card Use Led to the Financial Crisis

The use of credit cards in the 21st century is a record high. According to this source, each individual has at least two credit cards at this time. It is also common for these cards to have credit limits that are way beyond the actual capacity to pay of the credit card holder.

This situation led from one disastrous event to another leading to national credit card crisis and eventually a global financial crisis. It would be worthwhile to trace how bad credit card use contributed to the financial crisis in the past decade.

Step 1: To increase business, credit card companies launch tempting offers to consumers. This includes easy credit card access, and a credit limit that is beyond the annual income of the average consumers.

Step 2: Consumer gets a credit card and makes his or her first purchase to get a feel of it.

Step 3: Consumer pays the credit card company. Everybody is happy.

Step 4: Consumer now uses the credit card for routine purchases including groceries, regular shopping, movies and dinner dates. At the end of the month, he or she pays the credit card company. Again, everybody is happy.

Step 5: Consumer stumbles upon a tempting gadget that is bit too expensive for his or her income level. But wait, “my credit limit can help me afford it”, he/she realizes.

Step 6: Consumer takes out his/her card and goes home with a new toy. Beaming a big smile and thinking that this can be repaid in a matter of time.

Image-1Step 7: Consumer passes by a fancy restaurant and realizes that his or her credit limit affords him or her to taste something fancy once in a while.

Step 8: Consumer discovers holiday destination and realizes that his or her credit limit affords him or her to take some day off and lounge in the luxury of a world class resort.

Step 9: Consumer gets a bill from the credit card company and realizes that his monthly pay check is not enough to pay the total bill. Scared of the big penalty and interest rates, he or she uses his or her paycheck to pay the amount billed. The credit card company is happy. The consumer says, “it’s good that I have a credit card to pay for my groceries and the rent until the next pay check.”

Step 10: Consumer uses the credit card to buy groceries, pay the rent, pay the mortgage, and everything.

Step 11: Consumer gets the bill and is able to pay only half of the total amount billed using all of his or her pay check.

Step 12: Consumer uses the credit card to survive.

Step 13: Consumer pays a fourth of the total amount billed.

Step 14: Consumer uses the credit card to get through life.

Step 15: Consumer pays only 1/10th of the total amount billed. By this time, the interest payments are even higher than the monthly income.

Step 16: Consumer uses what remained of his or her credit limit to get by.

Step 17: Credit card company calls. Frantic that all of its clients are unable to pay.

Step 18: The banks write-off a large amount of loans. Financial institutions are on the brink of bankruptcy. The consumer gets laid-off. They all turn to the government for help.

You know what happened next.


What to Do If You Have Credit Issues?

Credit issues can impact just about every aspect of your life. Why? If you do not have a good credit score, it is harder to qualify for mortgage loans, auto loans and other types of financing. In addition, a bad credit score can result in higher insurance premiums, and you may not be able to secure certain types of employment.

Fortunately, there are effective ways to deal with credit issues. Since you didn’t get into this situation in one day, you can’t repair your credit overnight. Therefore, you should not expect a better credit score after only a few days or weeks. Even so, if you take the necessary steps to get your personal finances on track, your credit score will gradually improve and you’ll be a step closer to achieving A+ credit.

Credit_Card1. Check your credit report each year

Many consumers do not check their credit reports on an annual basis. Your credit report provides a detailed account of your credit history. It includes your most recent accounts, balances, older accounts, as well as your account statuses.

When you apply for new credit, creditors review your credit report to see if you qualify for financing. But unfortunately, your credit report may not be accurate. A creditor may report information in error, or someone may steal your personal information and open accounts in your name.

Checking your credit report regularly is the best way to identify mistakes early and each consumer is entitled to one free report from each of the bureaus every 12 months.

2. Seek professional help

If you notice errors on your credit report, you can notify the reporting creditor to clear up any mistakes. In many instances, this is all it takes to improve the accuracy of your report. But sometimes, repairing serious credit report errors requires professional help.

Credit repair agencies have experience fixing mistakes on consumer credit reports. They’ll investigate a claim and work with your creditors to remove any information that’s inaccurate. Negative information on your reports can drop your credit score by several points. However, once this information is deleted from your report, your credit score will improve.

3. Understand how credit works

If you do not understand how credit works, you may not make wise credit decisions. Several factors influence your credit score, such as your payment history, the amounts you owe, the length of your credit history, the types of credit, and new accounts.

Since your payment history and the amounts you owe make up 35% and 30% of your credit score, respectively, it is important that you pay creditors on time and maintain low balances.

This is much easier to say than do. However, if you only charge what you can afford to pay, and if you pay your balances in full each month, you can improve a low credit score.

4. Get rid of your credit cards

Canceling a credit card may reduce the length of your credit history, thus lowering your credit score. Rather than get rid of credit cards, destroy your cards and only use cash. The less you use a credit card for purchases, the less debt you’ll accumulate.

In addition, do not splurge when applying for a loan. Oftentimes, consumers overspend when buying a house or car. As a result, a larger percentage of their income goes toward paying off these debts. They end up living paycheck to paycheck; and if unable to make ends meet, they might rely on a credit card. This complicates a financial situation. Therefore, know your limitations and be reasonable.

5. Establish new payment terms with your creditors

Defaulting on a credit card or loan, and then ignoring your creditors will not make the debt go away. The credit card company or bank may send your account to collections or seek a judgment. Both moves can damage your credit score, and this negative activity can stay on your report for up to seven years.

To avoid any collection accounts or legal action, always communicate with your creditors. Explain your situation and ask the creditor for a new payment arrangement. Based on your economic situation, the creditor may lower your monthly payment to an affordable amount, or temporarily suspend payments until your finances improve.

Realizing that you have credit issues might keep you awake at night. However, credit problems are not permanent. There are ways to rise above a low credit score. However, you need to be proactive and make wise credit decisions.

 


Credit Card Debt Weighing You Down?

The world revolves on credit. More and more individuals are dependent on these plastic cards for their daily survival. The problem with this is that you lose financial accountability and sound judgment over a period of time. Without credit cards in the picture, your expenditures will always be limited on one thing – how much cash you have on hand. When you are forced to work with the amount of cash you have with you, you’ll think twice and even thrice before making a major splurge. However, plastic cards allow you to bypass that. You can basically get whatever you want and pay for it later. The first part is relatively easy; it’s the second part that reins in all of the problems.

5451685974_aa00a963e41. Get rid of your credit card.

The first step to eliminating your credit card debt is by making sure that you don’t have any more of it any time soon. This would mean cutting up your credit cards. Don’t fall into the trap of using your credit card to cover the difference between how much you earn and how much you spend each month, even if you do pay the credit card bills once they come. This will only result in a cycle of paying and borrowing, and you’ll never free yourself from the bounds of credit card debt.

2. Get all of your bills and find out what you’re up against.

Ignoring the problem does not solve the problem. Underestimating the problem, because you do not know the actual extent and gravity, is just as bad. To know what you are up against, you should get all of your bills and find out how much you really owe. If you have bills which are missing, call up your credit card company and request for these bills although your overdue amount is usually found in your monthly bills. By know exactly how deep in debt you are, you can plan your payments accordingly and in a manner that allows you to settle your debt within the soonest time possible.

3. Organize your credit card debt according to their interest rates.

If you have more than one credit card with an outstanding balance, then you need to start prioritizing. There are two things which you have to take note of when paying off your debt – the principal debt or how much you originally owe, and the interest or how much you’re being charged for holding a debt. The higher the interest is, the longer it would take for you to shrink the principal especially if you are just paying the minimum. However, if you aggressively work towards eliminating that debt, the smaller principal will mean that that the interest, which is based on the former, will also shrink significantly.

4. Cancel a credit card once you have paid it off.

Debt, just like other mistakes, comes with an invaluable lesson and that is to never have one again. So it would be remiss if you using a credit card once you’ve already gone through the painstaking process of paying it off. On the other hand, cancel the credit card once you’ve already paid it off to keep you from getting tempted. All of these tips will teach you how to get out of credit card debt fast.

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Phil Farell is a finance writer who loves to give useful tips to overcome bad debts. He also shares his insights on investing, financial management and lease financing.


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