Eliminate Credit Card Debt
How do you eliminate credit card debt? Let us count the ways....
One, Two, Three...
Actually, there are five ways to eliminate credit card debt:
- Transfer your credit card balances to a card with a 0% introductory rate (the longer the introductory period the better) or with a low permanent APR. (Make sure there's no annual fee and no balance transfer fee.) If you get one with a 0% introductory rate, try to pay off the balance as much as you can during the introductory period.
- Enroll in a debt consolidation plan. This plan can eliminate credit card debt through negotiation and reduction in interest rates. It's done by a debt consolidation company, and once they get your balances and interest rates reduced, they combine them and you make one payment to the debt consolidation company each month instead of many payments to your creditors. The debt consolidation company makes sure your creditors are paid, and you're debt free in five years.
- Apply for a debt consolidation loan. Unlike a basic debt consolidation plan, this plan does not get you reductions. Instead, a lender gives you a check for the total amount of your unsecured debts, then you pay them off in full. It's a great feeling to be able to eliminate credit card debt all at once this way. However, you still have the loan to pay back. No problem--it'll be paid off within five years. How is this possible? Because the interest rate on the loan is so much lower than what your credit cards were charging. (Think single-digits.)
- Enroll in a debt settlement plan. This will score you reductions of 60-80% off your total debt balance. However, you have to pay the new, lower balance all at once and pretty much immediately. It also leaves a little blemish on your credit record.
- If you're a homeowner, get a debt consolidation mortgage. This is by far the best way for you to eliminate credit card debt. Similar to a debt consolidation loan, you get a check to pay off all your credit cards, but you get it from your mortgage company instead. The amount you owe is then added to your mortgage, and your interest rate is the same as what you're paying on your mortgage (these days, that's typically 4-6%).
With so many options when it comes to eliminating credit card debt, one is sure to be right for you.
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