Credit Card Debt Reduction
What are the steps to reduce your credit card debt?
Credit card debt reduction could be difficult if you are not fully aware of the process it involves. If you find that your credit card balance is piling up day by day, you might just consider the following steps for credit card debt reduction.
Steps to reduce credit card debt
1. Make an organized list – Make a list of all your credit cards including the interest rates, minimum payment and outstanding balance of each of your credit card. Then place the credit card with the highest interest rate on the top and the lowest at the bottom.
2. Make an estimate – Find the total minimum payment of your credit cards.
3. Stop using your cards – You must stop using your credit cards before you clear all your debts.
4. Make the minimum payments – You must try and pay more than the minimum monthly payment to repay your debt quickly.
5. Use the additional payments for high interest card – As the card with the highest interest rate is costing you more, maintain a balance by applying the additional payments to it.
6. Continue paying off your debts – Keep making regular payments till all your cards are paid off.
Settling your credit card debts
If you are unable to make payments even after credit card debt reduction, consider settling your debts with your creditors. Remember the following while negotiating with your company.
1. Stop making payments – You got to make your company believe that you are unable to make any payments; only then will they agree to make a settlement.
2. Make an initial offer – Make an initial offer that you can afford. It is free to start with 25% of your outstanding balance.
3. Take your time – Negotiations with the company requires patience and time.
4. Get the settlement deal in writing – Before making any payments, get the agreed terms in writing from the company.
Negotiating with your creditors is an effective and legal way to fight debt problems related to credit cards. But if you can't negotiate credit card debt reduction on your own, you may help of a professional debt relief company or a credit counseling agency.
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