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If you’re being slammed with credit card and other high-interest debt, you may be wondering where you can find relief. After all, 45% of Americans carry monthly balances on their plastic. But don’t despair; here … Read More
If you’re being slammed with credit card and other high-interest debt, you may be wondering where you can find relief. After all, 45% of Americans carry monthly balances on their plastic. But don’t despair; here are some tips for how to deal with high credit card debt.
Zero In On One Card
If you have multiple credit cards with various balances, it’s going to be a long haul to erase those debts. Why not, then, choose the card with the lowest balance and wipe that debt out first?
Or you could tackle the card with the highest utilization rate – your balance divided by the card’s limit. Because your score gets hit if you use more than 30% of your available balance, bringing your rate down could markedly increase your score.
You could also choose to pay off the card that has the highest interest first, while making minimum payments on your other cards.
Whatever strategy you choose, succeeding in having a card totally paid off can motivate you to continue your path to debt elimination. For help, check out high credit card debt relief from freedomdebtrelief.com.
Try To Lower Your Interest Rates
If you have good credit – a score of at least 730 – and are a long-time customer who makes timely payments, it wouldn’t hurt to call your creditor and simply request a reduced rate. Getting a percentage point or two knocked off could save you hundreds of dollars each year.
Here’s a tip: If you’ve been pitched a lower rate by another card issuer, let your current card company know. It may want to match the offer.
Move Your Balance
Consider shifting a balance you’re carrying on a high-interest card to one with a significantly lower one. Such a move could save you hundreds of dollars annually. Note, though, that this strategy only works well if you pay off the debt before the promotional period is over, usually in 12 to 18 months. You also need to make every payment on time. Otherwise, your rate could shoot up, and you could wind up in worse shape than before.
Try Peer-To-Peer Lending
If you have a job and a good credit score, you may want to mull borrowing cash to pay off your debt from online peer-to-peer lenders such as LendingClub.com or Prosper.com, where you may be able to snag a loan with fixed rates that can be up to 30% lower than most credit cards.
Double Up On Payments
Usually, card companies charge interest based on average daily use, so the sooner you make a payment, the faster your average daily balance drops. This could save you money on interest. If your budget’s tight, consider making a minimum payment, then making the same payment two weeks later. Try to keep this up until the debt is paid off.
It’s a near certainty that you can create more income by living in a smaller dwelling; driving a less-pricey ride, limit eating out, or reducing overall expenses for items such as your cell phone. Think about what would work for you.
Find A Second Income
Getting a part-time job or finding a “gig” that can help you pay off your debt is another good idea. You may be able to generate income online, perhaps through a blog. A few extra hours each week could make all the difference.
Now that you have some ideas for how to deal with high credit card debt, you can get started on the list and decide which moves are best for you. Before you know it, you’ll have a clear path to financial freedom.