subject: Credit Card Debt Elimination Legally Ethically—Three Steps To Take Today [print this page] Credit Card Debt Elimination Legally EthicallyThree Steps To Take Today
With the economy slumping and consumer debt growing many Americans are looking for ways to eliminate their debt. If you are one of them, you are probably looking for a method that leaves money in your pocket, is legal and ethical, and does not destroy your credit rating.
The bottom line is that repaying your debts in full is about the only option available that is both legal and ethical. When you use your credit card, you are borrowing money from the credit companies. By using your card, you implicitly agree to repay the whole amount, plus any accrued interest. While you might be in severe financial difficulty, ignoring that agreement is less than ethical.
However, whether you are barely meeting your monthly obligations or not, there are three things you can do to today to begin eliminating your debt.
First, stop borrowing money. Every time you use a credit card you make the problem worse. Unfortunately, it can be difficult to stop. Credit companies and merchants have made it very easy and convenient. Resist the urge. Use cash whenever possible. Studies have shown people who pay cash actually spend less money.
Second, create a payback plan. The sooner you start paying down your debt, the better. Because most credit companies charge interest against an average daily balance, every day you wait means more money out of your pocket. Sit down today and make a list of all your card balances. Decide an order in which to eliminate them, and put your list in that order. Pay the minimum balance on every card but the first on your list. For that card, pay the minimum plus as much extra as you can without stealing from your rent, clothing, or food funds. Once the first card is paid off, take the minimum balance and the extra and add it to the minimum balance for the second card in your list. Repeat until every card is paid off.
Finally, if you are struggling with your monthly bills pick up the phone and talk to each of your credit card companies. Tell them your difficulties and ask if you can work out a payment or settlement plan. If the first person will not work with you, ask to speak with their supervisor. In many cases, credit companies will be cooperative. If your situation is truly difficult, they would rather work with you to recoup some of the debt rather than risk losing it all. Please note, settlements and payment plans may negatively impact your credit rating. However, if your situation is awful, the damage to your credit rating will be much less than if you declare bankruptcy or stop paying.
What are you waiting for? Start today and watch your debts begin to disappear, legally and ethically.
