Sunday, December 10, 2006

Best Way To Eliminate Credit Card Debt - 3 Tactics For Lowering Bills

Eliminating credit card debt is a top concern among millions of consumers.
However, many people fail to outline a realistic strategy for reducing
debts. There are many approaches that will put you on the path toward
becoming debt free. Each person must assess his or her own situation and
create a plan. Here are three tips to help you become debt free within a few
years.

Recognize the Problem and Alter Spending Habits

Before you can take the necessary steps to reduce and eliminate credit card
debt, you must first acknowledge excessive spending and resolve to change
your lifestyle. Unfortunately, many people choose to live beyond their
means. Furthermore, many acquire excessive debts because of trying to "keep
up with the joneses."

Credit cards serve a valuable purpose. They are great during emergencies and
when you are financially strapped. However, if you are charging more than
you can afford to pay, this creates a huge problem. As you endeavor to
eliminate debts, be determined to stop using credit cards. Do not cancel
credit accounts. However, you may consider cutting your cards or storing
them away.

Pay Double, or Triple the Minimum Payment

If you are hoping to reduce credit card debts, you must be willing to pay
more than the asking minimum payment. In fact, paying only the minimum will
make it practically impossible to become debt free. Instead, attempt to
double, even triple your monthly payments. If possible, make a large payment
toward reducing your balance. This method is most effective.

Obtaining a lump sum of money is challenging. You may choose to use a tax
return or bonus money received from work. Getting a part-time job may also
provide you with the extra cash. If you own a home, take advantage of your
home's equity. Home equity loans or cash-out refinancing generally present
homeowners with enough cash to payoff high interest credit cards and other
debts.

Use a Debt Management Company

If you need assistance with managing large debts, think about contacting a
debt management agency. Trained debt management specialists will review your
credit and outline a plan for reducing debts. Furthermore, the company will
contact creditors and negotiate a lower interest rate. By doing so, a larger
portion of your monthly payments will go toward knocking down the principle
balance. Thus, helping you achieve your ultimate goal of eliminating credit
card debt.

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