Getting Rid of Credit Card Debt

Getting rid of credit card debt will take time and determination, but anyone that wants to be debt free more than they want to deal with debt can do it. You will need a plan and you will have to follow it, but in time you will begin to see your credit card balances decrease and before you know it they will be gone. You should begin by looking at your debt. What kind of debt do you have? Is it consumer debt, student loans, medical bills or something else? Is your debt current, less than 3 months past due or more than 6 months past due? What is your capacity to repay this debt at the current time?

Loans are not a good option for debt and I am going to assume you want to avoid bankruptcy, so that leaves you with paying the debts off on your own, with nonprofit debt management plan or through debt settlement. If you are going to pay it off on your own, you should be current or close to it and be very disciplined about making on time payments. It will be essential to be able to make more than the minimum payment or you will be repaying your debt for 10 years or more. This will mean decreasing your expenses and finding ways to make more money. The first thing you want to do is call your lenders and ask them to lower your interest rate. This will save you time and money in repayment.

Some people tend to feel overwhelmed by their debt or may be a month or two behind. This is where you may want to consider using a nonprofit credit counseling agency to consolidate your debts and begin repaying them. This option will allow most unsecured debts. Student loans, tax debt and alimony are a few that cannot be included. The enrolled debts are consolidated, so that only one payment is necessary. Your interest rates are lowered and the fees eliminated. Your payment will be about 2% of the total amount of the debt in the plan. You should be debt free in less than five years with this plan. This is a great alternative, if you are looking for the structure necessary to repay a lot of debt.

Debt settlement is an option that will reduce the balance on the debt owed through a negotiation process with the lender. Generally, the lender will forgive 40%-60% of the debt. This debt usually has to be unpaid for at least 3 months before the lender will consider this alternative. In many cases, you will have to be prepared to make this payment within a few days of the agreement. There are services that will negotiate on your behalf for a fee. If you are going to use a service, make sure you do your homework. This industry is known for unscrupulous operators. You can actually do the negotiating yourself and save the fee. This option will affect your credit negatively and you will have to pay income tax on the amount forgiven. Debt settlement should be used only when there is no other alternative available.

Having debt puts limits on your life and the only way you are going to lift these limits is to pay off the debt and become financially stable. If you have debt, take the time to evaluate your accounts and make a plan that will help you eliminate the debt and allow you to move forward with your life.

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