Credit card debt is definitely real! All of us have it, one way or the other. Some of us love to spend it all on shoes and wardrobe, while some of us have secret habits to satisfy – like eating out a lot, going to the movies, etc.
If you are reading this article and wondering if you have similar habits and regretting the same, then, don’t! What’s done is done. We will try to find out ways in which we can smartly settle the Credit Card debt.
However, before that, did you feel like evading it? For once? If the answer is Yes, then this part of the article is more important for you from the tips! A study showed that the Credit Card debt in the USA has increased to $413.7 billion, as of June 2020!
Never forfeit Your Credit Card
You might have ignored it for so long and have been planning to forfeit it. But hey, never get rid of your credit card debt. Why? Here’s your answer.
Credit Score: A lot of complications happen when you do not pay off your credit card debt. Your Credit score falls, and the subsequent interest rates for loans start to increase, and hence, you start getting under crushing debt. This has led to a lot of people declaring bankruptcy and all their assets being taken away by banks and other agencies.
Debt Collection Agency: This could be the worst nightmare for You. Imagine a group of individuals smart enough to track you down, and then, chase you everywhere for payments. Yes, that’s what debt collection agencies do to You.
According to a survey in 2018, there were close to 258,000 jobs in this industry. Hence, there are a lot of people and they will not hesitate to embarrass you, poke you, disturb you at work or anything as long as they realize the debt.
Now that you have understood two of the major reasons why you should clear off your debt, let’s find out some of the smartest tips to settling credit card debt.
The Avalanche Method
This is a tried and tested method by many from the 37% of the households in America, under credit card debt. In this method, it is really simple. All you have to do is make a sheet that has the amounts due along with the interest rate it carries.
After this, start paying the bare-minimum against all the dues and pay higher amounts to the account carrying higher interest. Once that is paid off, go to the next account with a higher rate and keep doing this till all of the debt is paid.
This really helps in saving a lot of interest and at the same time, smartly pays off the debt.
The Snowball Method
No one is asking you to play with snow! All you have to do in this case is keep on paying the minimum amount against all the debt you owe, and start paying more against the lowest amount of debt. With time, the lowest amount will disappear and you can continue the same against the next lowest amount.
This will ensure systematic pay off of the debts and you will feel a lesser burden after each settlement. However, you may not save a lot of interest.
You can always take a single loan, against the equivalence of all the credit card debt, pay the debts off, and then start paying the loan with single monthly installments. With this, it will help you feel the burden less and you can pay the debt off, with ease.
Try enrolling in lesser interest card program
If you have a debt against a higher-interest card and you have the means to avail a lesser-interest card, then, go for it. This will help you to cover the debt on the higher interest card and you can choose to pay lesser interest on the new card. However, be cautious and do not use it to buy other things!
Ask from friends and family
The best part about this is that their loans do not carry an interest rate and you can always take a little more time to pay that off. However, only resort to this when you have no other options and you’re frustrated and desperate.
Negotiating and Debt Settlement
If you have no ways to pay the entire debt off, you can always try to negotiate smartly and come up with a consensus to clear off the debt. Some debt collection agencies Washington, San francisco or somewhere else provide this option with multiple other conditions that you must fulfill. Talk to the debt counselors of your area and try negotiating with them.
With these 6 tips, you will surely settle all your credit card debt. But remember, debt settlement is more about patience. Be patient and you will soon reach the end line!