  |
Latest offers on Credit Cards, Home, Car and Personal Loans UK. |
 |
|
|
› ›
How to Get out of Credit Card Debt Using Self-Help Techniques
How to Get out of Credit Card Debt Using
Self-Help Techniques (Part 2)
Get Another Job
That's right! It might temporarily take a part-time job delivering
pizzas to get you and your family back on the right path. Or if you are
living off one income so mom (or dad) can stay home and raise the kids,
consider opening a home daycare or other home based business. That way
you still get to be with your own children and earn some extra money at
the same time.
Sell Some Stuff
Chances are you have lots of sellable stuff you aren't using packed in
the back of your closet or in boxes in your garage. And if you aren't
the sentimental type go ahead and sell grandma's china. Even if you are
sentimental, consider keeping only your most treasured heirlooms. Try
not to overlook something that doesn't appear valuable. The Smiths
inherited a painting that hung in her grandmother's garage for years and
it ended up being auctioned off for $40,000 at Christie's in Boston!
Tap Into Your Assets
If you do have some savings, consider pulling some of it out to pay off
your debt. You typically don't earn near enough interest in a savings
account (typically around 1-2%) to outweigh the interest you're paying
on credit card debt (typically around 15%). You can consider tapping
into a 401K plan too, but be cautious with this option. You will need
retirement savings some day and according to Detweiler, these types of
accounts are usually protected during bankruptcy proceedings. It may be
a good idea to speak with a lawyer about bankruptcy options before using
retirement money.
Moving Forward
Once you've found some extra money to start paying more than the minimum
you're ready to move forward. Determine a fixed monthly payment you can
put towards the debt. Pay only the minimum on all your credit cards
except the one with the highest interest rate toward which you will pay
as much as your budget allows. Detweiler adds,
--------------------------------------------------------------------------------
"For most people paying the highest interest rate credit card is best.
Once it's paid off, then move on to the next highest interest rate
keeping your same fixed monthly payment."
--------------------------------------------------------------------------------
Another option that worked well for the Smiths is paying the lowest
balance credit card first. Smith said that quickly getting rid of the
first credit card debt gave her the confidence and motivation to move
onto the next.
Contact Credit Card Issuers
It's always a good idea to contact your credit card issuer to try and
negotiate a lower interest rate. If they won't give you a lower rate,
try applying for a new low-rate credit card. The "Card Reports" section
of CardRatings.com is a great place to shop and compare credit card
offers. If you do get a new low-rate card then immediately transfer as
much of the balance from your higher rate card(s) as possible. If
possible, try not to exceed 50% of the credit limit of any of your cards
as doing so could lower your credit score. By staying under the 50% mark
you may find new low-rate credit card offers appear in your mail box,
which could give you a valuable tool in negotiating.
If you are behind in your payments, some credit card issuers may even be
willing to set you up on a hardship plan where your required payment is
reduced. Credit counseling agencies may even be a better alternative.
Detweiler notes,
--------------------------------------------------------------------------------
"If you go through a credit counseling agency your accounts after 3-6
months may be re-aged, which means your accounts will be in good
standing once again."
--------------------------------------------------------------------------------
A hardship program done directly with the credit card issuer won't have
this advantage, so as long as you are paying less than the contractually
agreed upon amount your account will have a negative standing.
Final Thoughts
Getting out of credit card debt is never an easy process, but it can be
done. The extra effort definitely pays off, not only financially but
also when it comes to your peace of mind. We sincerely hope that these
self-help techniques will help you achieve the new American dream?
freedom from debt for all!
(Read Part 1)
By Amy L. Cooper-Arnold,
CardRatings.com
Staff Writer
|
|
|
|
|
|
|
 |
The Credit
Centre |
 |
| |
|
|
|
|
| * Legal Notice: Due to the rapidly, fast
changing nature of some credit card offers and financial
information, CreditWorldUK.com and its authors cannot
make representations as to the accuracy, completeness,
suitability, or validity of any information on this
site. Neither CreditWorldUK.com nor its authors shall be
liable for any accuracy, errors, adequacy or timeliness
in the content, or for any actions taken in reliance
thereon. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
© 2005-2008 Virtual Office Space › | | |
| |
|
|
|
 |
