5 Ways To Pay Off Credit Card Debt
These days more than ever, consumers are in desperate need of ways to pay off credit card debt. Below are the top 5 debt relief options used pay off credit card debt:
1.Paying more than the minimums: Paying more than the minimum monthly payment is not the fastest way to get out of credit card debt, but it definitely will make a dent in those balances quicker than just making the minimum payments ever will. It is important to know that by paying the minimums, you are paying almost all interest. Then the next month, your interest builds again because you have not reduced the outstanding balance by much. If you only pay the interest each month, you never wind up reducing the principal balance down and this cycle keeps you in debt for quite a long time. This is not the fastest (or cheapest) debt relief option but if you are dead set on protecting your credit and paying off your debts in full, this option will eventually work for you.
2.Debt Paydown: This option is much less aggressive than most of the other debt relief options as it does require that the balance of the debt is repaid in full, however, significant savings in interest are obtained. Debt Paydown is a sophisticated software program that will mathematically determine, out of thousands of possible repayment scenarios, which is the absolute best repayment option that will save you the most money and pay off the debts in the quickest amount of time. The software will take into account all of your debts, their related interest rates and due dates, as well as your available monthly income. The software can also recalculate the optimal repayment scenario based on changes like a change in the amount of money you have available in a certain month. Debt Paydown will factor in all of your debts, including credit card debt, mortgages, auto loans, etc., while most other debt relief options will not cover debts like auto loans and mortgages. For the individual that wants to pay back their debts in full, achieve significant savings in interest over time, and is looking for a custom repayment plan that does not negatively impact their credit score, Debt Paydown is the best option.
3.Credit Counseling: Credit counseling has become a very popular choice for millions of Americans. This option allows you to " hand over" your credit card monthly payments to a professional not-for-profit credit counseling agency which will debit your bank account once a month and then make payments to your creditors so you do not have to send out multiple payments to multiple creditors each month. This agency has pre-set terms with all of the creditors and if you have a high average interest rate on your cards and a high monthly payment, you may be able to get better terms by working with an approved credit counseling agency. Most of the time, your interest rate can be lowered, saving you money over time in interest payments and many times they can get you a monthly payment that you can afford. You will have to go through a counseling session to discuss the reasons why you are in debt and demonstrate you have the means and intention to get out. Credit Counseling will result in you paying back your entire balances plus interest over time, but less than you likely would have paid on your own simply by making the minimum payments each month. This program may have a negative impact on your credit but not as bad as some of the other popular options.
4.Debt Settlement: This method should only be considered if you are legitimately facing a financial hardship and you already have damaged credit and do not want to declare bankruptcy. Debt settlement is quickly becoming the primary choice for strapped consumers who find themselves unable to make payments to their credit cards and still afford their minimum living expenses. This method basically allows you to hire professional negotiators to work on your behalf with your creditors in an effort to settle your outstanding balances for pennies on the dollar. It is not out of the norm to see savings of 50% or more. Debt settlement does have its risks including aggressive collection calls, damaged credit and potential lawsuits, but many see the benefits outweighing the risks and choose this option. It is a private matter between your creditors and yourself, which many see as appealing when compared to the public nature of having to file for bankruptcy. Be sure to research the professional debt settlement company you may work with before signing any documents as there are good apples and bad apples out there.
5.Bankruptcy: Bankruptcy is like the 800 pound gorilla in the corner of the room. Everyone wants to avoid it at all costs. Bankruptcy laws have changed in the past few years and the changes were not in favor of the consumer. It is now more challenging than ever for a consumer to qualify for a chapter 7 Bankruptcy. Chapter 7 is the option that actually allows a Judge to wipe away all debts so the consumer can get a fresh start. The challenge with this option is the creditors do not get their money and they have no say about it because the Judge makes the ruling. Because of this, they lobbied Washington and got the laws changed to make it tougher to qualify. The alternative option is Chapter 13. This bankruptcy option is very similar to credit counseling. Chapter 13 is when a Judge prioritizes the consumers outstanding debts, eliminating interest, but forcing the consumer to enter into a payment plan to get the debts paid off. Both Chapter 7 and Chapter 13 bankruptcy are on the public record and will have a serious damaging impact on your credit. But for millions of Americans today, this option is a last resort and one that is necessary if you are in serious need of help.
Please make sure that you research each of these options in depth before choosing which one may be the best fit for your specific situation. Remember, there are many good companies out there and many not so good. Be sure to ask questions and make an informed decision before you hand over your finances to anyone. If you would like additional information on each of these debt relief options then sign up for the New Debt Rules Insider Club Newsletter at www.NewDebtRules.com
1.Paying more than the minimums: Paying more than the minimum monthly payment is not the fastest way to get out of credit card debt, but it definitely will make a dent in those balances quicker than just making the minimum payments ever will. It is important to know that by paying the minimums, you are paying almost all interest. Then the next month, your interest builds again because you have not reduced the outstanding balance by much. If you only pay the interest each month, you never wind up reducing the principal balance down and this cycle keeps you in debt for quite a long time. This is not the fastest (or cheapest) debt relief option but if you are dead set on protecting your credit and paying off your debts in full, this option will eventually work for you.
2.Debt Paydown: This option is much less aggressive than most of the other debt relief options as it does require that the balance of the debt is repaid in full, however, significant savings in interest are obtained. Debt Paydown is a sophisticated software program that will mathematically determine, out of thousands of possible repayment scenarios, which is the absolute best repayment option that will save you the most money and pay off the debts in the quickest amount of time. The software will take into account all of your debts, their related interest rates and due dates, as well as your available monthly income. The software can also recalculate the optimal repayment scenario based on changes like a change in the amount of money you have available in a certain month. Debt Paydown will factor in all of your debts, including credit card debt, mortgages, auto loans, etc., while most other debt relief options will not cover debts like auto loans and mortgages. For the individual that wants to pay back their debts in full, achieve significant savings in interest over time, and is looking for a custom repayment plan that does not negatively impact their credit score, Debt Paydown is the best option.
3.Credit Counseling: Credit counseling has become a very popular choice for millions of Americans. This option allows you to " hand over" your credit card monthly payments to a professional not-for-profit credit counseling agency which will debit your bank account once a month and then make payments to your creditors so you do not have to send out multiple payments to multiple creditors each month. This agency has pre-set terms with all of the creditors and if you have a high average interest rate on your cards and a high monthly payment, you may be able to get better terms by working with an approved credit counseling agency. Most of the time, your interest rate can be lowered, saving you money over time in interest payments and many times they can get you a monthly payment that you can afford. You will have to go through a counseling session to discuss the reasons why you are in debt and demonstrate you have the means and intention to get out. Credit Counseling will result in you paying back your entire balances plus interest over time, but less than you likely would have paid on your own simply by making the minimum payments each month. This program may have a negative impact on your credit but not as bad as some of the other popular options.
4.Debt Settlement: This method should only be considered if you are legitimately facing a financial hardship and you already have damaged credit and do not want to declare bankruptcy. Debt settlement is quickly becoming the primary choice for strapped consumers who find themselves unable to make payments to their credit cards and still afford their minimum living expenses. This method basically allows you to hire professional negotiators to work on your behalf with your creditors in an effort to settle your outstanding balances for pennies on the dollar. It is not out of the norm to see savings of 50% or more. Debt settlement does have its risks including aggressive collection calls, damaged credit and potential lawsuits, but many see the benefits outweighing the risks and choose this option. It is a private matter between your creditors and yourself, which many see as appealing when compared to the public nature of having to file for bankruptcy. Be sure to research the professional debt settlement company you may work with before signing any documents as there are good apples and bad apples out there.
5.Bankruptcy: Bankruptcy is like the 800 pound gorilla in the corner of the room. Everyone wants to avoid it at all costs. Bankruptcy laws have changed in the past few years and the changes were not in favor of the consumer. It is now more challenging than ever for a consumer to qualify for a chapter 7 Bankruptcy. Chapter 7 is the option that actually allows a Judge to wipe away all debts so the consumer can get a fresh start. The challenge with this option is the creditors do not get their money and they have no say about it because the Judge makes the ruling. Because of this, they lobbied Washington and got the laws changed to make it tougher to qualify. The alternative option is Chapter 13. This bankruptcy option is very similar to credit counseling. Chapter 13 is when a Judge prioritizes the consumers outstanding debts, eliminating interest, but forcing the consumer to enter into a payment plan to get the debts paid off. Both Chapter 7 and Chapter 13 bankruptcy are on the public record and will have a serious damaging impact on your credit. But for millions of Americans today, this option is a last resort and one that is necessary if you are in serious need of help.
Please make sure that you research each of these options in depth before choosing which one may be the best fit for your specific situation. Remember, there are many good companies out there and many not so good. Be sure to ask questions and make an informed decision before you hand over your finances to anyone. If you would like additional information on each of these debt relief options then sign up for the New Debt Rules Insider Club Newsletter at www.NewDebtRules.com
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