It doesn't take long to get into debt, but trying to pay off consumer debt can be overwhelming. Being in debt creates stress and frustration and prevents the consumer from living life to the fullest. There are strategies to help those in debt begin to pay off credit card balances and to avoid consumer debt in the long run.
Pay Down Debt
It is important to stop using credit cards when you are trying to decrease your debt. Pay as much as you can on the card that holds the highest interest rate and pay the minimum balance on all other cards. When that card is paid off, use the same method on the card holding the next highest interest rate. This strategy protects your credit score and allows you to feel success as each card is paid off. If you do not have extra funds to begin paying down your debt, consider taking a part-time job and use your paychecks exclusively for paying off debt.
Debt Negotiation
Another strategy is debt negotiation. Contact creditors in person or by phone to try to get interest rates lowered on the high-interest balances. You may qualify for this if you can prove you are currently facing a financial hardship. Creditors do not have to lower their rates, but it may be in their best interests if it allows the consumer to pay off the balance.
Debt Consolidation
Consolidation combines smaller debts into one larger loan with only one payment per month. Debt consolidation turns unsecured debt into secured debt. The debt becomes secured by the consumer's property, which may be seized if the consumer fails to pay.
Credit Counseling
Credit counselors assist those in debt to develop budgets. They advise on managing money and may provide follow-up workshops or other sessions. It is important to research credit counselors carefully and not to do business with anyone who charges high fees. You do not want to get further into debt.
Adjust Attitude Toward Spending
Think about the underlying causes of getting into debt. Are you spending as a form of recreation or to make yourself feel better? Once your debt is paid off, you do not want to adopt the same spending pattern as before. Living within your means is healthful for your bank account and for your emotions.
For Lower Interest Credit Cards & Balance Transfer Credit Cards,
Visit: www.CherokeeFinancialInc.com
No comments:
Post a Comment