Did you know you could save thousands of dollars in interest by eliminating your credit card debt? During 2008 the average American household was approximately 10,000 USD in credit card debt. In the same year, the average late cost per month was more than 35 USD while those who spent beyond their credit limit rocketed to nearly 27 USD. Interest rates as high as 27 percent mean you pay back 127 dollars on a 100 dollar purchase. Over time, this compounds and costs even more.
Pay Off Your Credit Cards
You aren't alone if you feel overwhelmed by the amount of credit card debt you're buried under. Paying off the larger credit card balances may seem impossible, but they're not! Try consolidation, for example. Get all of your credit cards and find a middle ground. Look specifically for a way you can wrap two payments into one month. Never pay just the minimum amount, no matter how low the interest rate! Always try to pay at least twice the minimum amount. It may stretch your monthly budget at first, but freeing yourself of credit card debt is worth the added effort.
Credit Counseling
Credit counseling services and debt settlement companies help thousands of people just like you every day. Consolidation programs are available to help you lower your interest rates and bring your monthly payments to a manageable level. These trained professionals will call your creditors and negotiate for you. You only need to provide them the information they need to get started.
Rebuild Your Credit Score
After paying off your credit cards and getting your finances back under control, work on rebuilding your credit score. It would be very beneficial to get a credit card. Don't panic! Don't get just any random credit card. Get a secured credit card with a 500 USD limit. Secured credit cards are similar to debit cards. They are attached to a bank account or savings account and you may only spend the money from that account. The credit card company reports to the three major credit bureaus and your credit begins the long, hard climb upward.
Gas and store cards are easy to qualify for. They often have a manageable credit limit. Never max out your gas or store card for any reason. This will only cause you more trouble in the long run. You've worked long and hard to get to where you are now, don't mess it up. In fact, try to keep your balance at about 50 percent of the maximum allowed amount on the card.
Open a savings account and make monthly deposits. Owning a savings account will allow you to be prepared for unexpected expenses, allowing you freedom from credit card debt. Once you have two months of living expenses in your savings account, it's relatively safe for you to take out a small loan using your savings as collateral. Banks and other financial institutions report to credit bureaus and will help build your credit in the same way a secured credit card will.
The above mentioned cards are simply recommendations. Your overall goal is to manage your finances, don't let them take over your life. It's very beneficial to the success of your financial future that you do not flood your wallet or purse with unnecessary credit cards. One major credit card with a reasonable balance and interest rate is plenty as long as you maintain your newly formed habit of depositing money into your savings account and using your credit card less frequently.
About the Author:
Michael Barsoum's mission is to help consumers become debt free within 12-36 months, through his
credit card debt settlement and debt negotiation services. To learn more about debt settlement services, visit
http://www.mach3debtsettlement.com.
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445
Date Published :
Feb 26 2009