Debt Counseling - What Do I Do When I've Reached My Credit Limit?
Debt Counseling - What Do I Do When I've Reached My Credit Limit
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Debt is something that you can't wish away. With high interest rates the credit card debt will hang around you until you take some serious action against it. Here are some tips that you might find useful in tackling your debt problem.
1. Pay more than minimum amount due: When a customer is in the habit of paying only the minimum that is due on the account then the total balance hardly gets affected. The minimum amount is usually 2 % to 3 % of the total balance whereas the interest rate that is charged is much higher than that. So it makes more financial sense to pay more than the minimum that is due in order to reduce the total amount.
2. Use your savings: The interest rates that you are paying to credit card companies are much higher than what your savings are earning in the bank. Hence use your savings to pay off your debts first.
3. Re negotiate the loan terms: It is possible to negotiate a lower interest rate with your creditors if you are finding it difficult to pay off your loans. You can get the extra charges removed from your account. The treat of bankruptcy works when trying to re negotiate terms of loan.
4. Opt for legal debt relief options: there are many debt relief options doing rounds in the market. A few of them are genuine while the others are just a hoax. Some of the good relief options are:
Debt settlement: In this method a debtor can get a reduction in the total debt amount through mutual agreement between the debtor as well as creditor.
Debt consolidation: This method helps a debtor to take out one loan in order to pay off other loans with high rate of interest.
Their are several debt relief options available in this market so it would be wise to speak with a debt relief specialist to determine which option makes the most financial sense for you. Whether it is credit counseling, debt settlement, debt consolidation, or bankruptcy, a debt relief specialist will be able to steer you in the right direction.