Realizing that you are drowning in debt can be overwhelming. However, you can get out of debt and attain financial freedom with time and determination. Achieving financial freedom is easier if you have the right tools and knowledge. In addition, you don’t have to deal with your debts alone. Certified professional debt consultants such as Freedom Debt Relief can help you understand how to get out of credit card debt.
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So, how do you get out of credit card debt?
There is no one way to do it. A plan that may work for one person might not work for another. If you are not sure how to get out of credit card debt, we have prepared some steps you can take. However, these steps don’t guarantee success but will point you in the right direction.
Find the Right Payment Strategy
Depending on the amount, you could try a DIY method like debt relief, consolidation, and debt snowball. The right payment strategy will help keep you and your credit card debt in check. Here are some strategies you should consider.
Pay more than minimum
Credit card providers often place a sustainable monthly minimum payment of around 2% to 3% of the total balance to ensure you can make timely payments. The problem is banks create money through interest charged every time you pay, so the longer you take to clear the debt, the more money the bank makes and that minimum payment is designed to keep you paying for as long as legally possible.
The debt snowfall strategy works using your sense of accomplishment as motivation. You start by prioritizing your debts by amount, initially focusing on the small ones. After clearing the small debts, the amount you used to clear is rolled into paying the next loan until you finally clear all your debt.
This is similar to debt snowball, but the debt avalanche strategy swaps your priorities. Instead of paying the smallest debt, you start by paying off the credit card with the highest interest rate. The debt avalanche is considered to be faster and cheaper when compared to the debt snowball.
A modern way of payment is through automation. This makes sure that the debt is being paid on time to avoid racking up additional costs in late fees. If you are using debt snowfall or avalanche, you need to be a little hands-on to ensure you are contributing precisely the right amount to each account.
Consider Debt Consolidation
If you have good credit but feel overwhelmed by debt, you should consider consolidating them into a single account. By consolidating debt, you only have to make a single payment every month to try and reduce the balance. While it might seem counterintuitive, you need to apply for a credit card with a 0% balance transfer card.
You can now transfer all your credit card debt to that one account for simple monthly payments without having to pay interest. In addition, you could also take out a fixed-rate debt consolidation loan to pay off your debt. You will still have to pay interest rates, but they tend to be lower for personal loans compared to credit cards.
Seek Debt Relief
Suppose the total monthly payment is higher than you can deliver, and you are really finding it challenging to get the debt under control. In that case, it might be time to get some serious help from companies like Freedom Debt Relief to get a solution.
Through their debt experts, such companies help negotiate with your creditors to reduce the amount of debt you need to pay, allowing you to resolve the debt cheaply and in less time. Apart from debt-relief options, it would help to file for Chapter 7 bankruptcy, which wipes out unsecured debt such as credit cards, but it has its perks. Chapter 13 bankruptcy can help you restructure your debt into a payment plan over three to five years.
Your Debt Relief Partner
At Freedom Debt Relief, we have been helping people get out of debt for the past 15 years. We have experience creating custom debt relief programs to help you get the best possible results. Our four-phase program revolves around how to get out of credit card debt by helping your account grow, negotiating with your creditors, settling the debt, and finally, financial freedom. Contact us today for more information about our services, or complete our simple online form to get started.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.