Personal Financial Planning is not complete until you manage your debts.
Living with Debts you just cannot imagine a financial stable and secure life for yourself.
Debts in any form are unhealthy for your financial health and can leave a severe dent in your pocket. You can have debts such as borrowings, personal loan, auto loan, home loan, and even credit card debt.
You invariably need to come out with viable and sound solution(s) so as to be to be able to deal with debts effectively and efficiently. Clearing Debts you can hope to move on the path of financial freedom and security.
In this post, we have come up with certain useful tips on How to Clear Credit Card Debt. By clearing your Credit Card Debt, you can hope to save lots of dollars and hence build your financial status.
So if, you are too battling with Credit Card Debt which is often regarded as ‘Devil’s Debt’, you can use the techniques described below to get rid of your debt on Credit Card(s).
Fix a Budget
Though it may not be possible for you to pay off your credit card debt in full each month, but certainly you can take steps to clear your credit card debts quickly. As a foremost step, you need to fix a budget for paying off your credit card debt. So list down your monthly expenditures and come out with an amount that you can afford towards your credit card debt.
For example, allocating a budget of $200 towards a $5000 credit card debt can easily enable you to clear the debt in just three years time. Hence, fix a budget according to your repaying capacity and stick to it. You can even make direct debits for paying your credit card debts.
Paying the minimum due on your credit card would not be beneficial for you as this prolongs the debt repayment time as well as increases the interest amount charged on your credit card debt.
Pay the Maximum Amount towards the Highest APR Credit Card
Each Credit Card is associated with Annual Percentage Rate which in turn determines the interest rate that you pay over the Credit Card Debt. A Credit Card with higher APR charges higher interest so; you have to pay more to clear the debt on that credit card. Hence if, you have multiple Credit Cards, then pay the maximum amount towards that Credit Card which has the highest APR. In doing so don’t forget to pay the minimum monthly amount due on the rest of your credit cards. By this, you keep your credit ratings good.
This way, you can quickly clear the debt on the highest APR Credit Card and thus save much of your money that otherwise you would have paid in the form of interest and other charges. Now, repeat the procedure for the next highest APR Credit Card and continue this until you have cleared debt on all of your Credit Cards.
Use 0% Balance Transfer Card and reduce the Interest paid on Your Credit Card Debt
Usually you pay high interest on your outstanding credit card debts. Well, you can drastically reduce your credit card repayments by using a credit card which allows balance transfer at 0% rate of interest for a fixed period of several months. This way you can significantly reduce the amount paid in the form of interest charges on your credit card debt.
You should make most of this opportunity and pay off the dues you have on your credit card in the introductory period of 0% in which you are not charged any interest on the credit card outstanding. You should make sure that you pay each month so that you continue to get the offer of 0% (interest free) balance transfer. This is advantageous for you as you don’t have to pay any interest on your credit card debts.
Moreover, the interest free period on balance transfer can normally range from 12 months to 24 months, which in itself is a good time to clear your Credit Card Debt easily without taking any financial burden.
Take the Route of Negotiation
If you are facing a tough financial situation and find it hard to repay your credit card debts, then you should take the route of negotiation with the credit card companies. You can explain your financial situation and request the credit card companies to restructure and reschedule the payments so that it becomes easy for you to repay the debts. The credit card companies might consider your request and agree to lower interest rate or reduce the overall outstanding on your credit card. This can immensely help you to manage the payments for your credit card debts.
Take Professional Help
If your credit card repayments bother you and you are not able to manage your debts, then a better and effective way is to take Professional help. There are many Debt Management Agencies which can help you in structuring and managing your credit card debts. They devise a Debt Management Plan so that it becomes easy for you to repay your credit card debts. They negotiate on your behalf with a credit card companies and come out with affordable repayment plans. They provide debt advice, restructure debts into easy to repay plans, request credit card companies to freeze interest and other charges, and help in the distribution of payments related to credit card debts.
These are some of the ways in which you can clear credit card debt. So, you see that managing Credit Card Debts is not difficult at all. From now on, how to Clear Credit Card Debt should not be a question for you. Using the above ways, you can easily and effectively clear your credit card debt(s).