Being burdened with any sum of credit card debt can weigh on you day and night
. The mounting credit card balances and interest rates are enough to make anyone pull their hair out. What these credit card companies dont want you to know is that no matter how much debt you have to repay, there is a way out. With this simple step by step process, you will learn how to negotiate credit card debt and consolidate credit card debts. Peace of mind and a higher credit score are in your future if you just follow the steps.
1. Change your spending ways
It is crucial that you resolve to spend less money than you make. Even if you really want to purchase something dont pull out the plastic. If you cant afford it today put the credit card away!
2. Learn the difference between good and bad debt
Good debt will have an interest rate well under 10 %. This debt will often come with tax advantages as well. Good debt also implies that whatever you purchased on credit will be appreciating in value. Examples of this are a mortgage on your home or student loans. Bad debt is pretty much everything else. No more cash advances at 30 % interest.
3. Figure out who are your real friends
Rummage through your pile of cards and pick one or two that have the lowest annual interest rate. Just because you only have one or two doesnt mean you can spend the same. These are strictly for emergency situations, while the rest can be hidden in some dark place never to be seen again.
4. Accumulate your bills and determine your highest interest rate
Gather all of your bills and find the minimum monthly payment for all accounts and add them together. This is the minimum you must pay each month, but you must add on a large sum to that to make a dent in your balance. Then determine which of the accounts holds the highest interest rate(s) and pay those off in full ASAP.
5. Be Aggressive!
You have to be proactive in paying down your credit card debt. Make sure you dont overdo it and miss payments to your car or home, but grab the reigns. Ask for a lower interest rate. If your rate is 15 % ask them to lower it to 11 %. Tell your rep you want to repay them and are a loyal customer, but other credit card companies are giving you better offers. Its better for them if you pay back everything at 11 % than nothing at a higher rate.