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Proven Credit Card Debt Solutions to Suit Your Needs

In these tough economic times, many consumers have found credit card debt catching up with them despite their best efforts to pay down their debts. For some people it’s hard to pay more than the minimum each month, or to make payments on time. In these cases, the accumulating interest, late fees, and possibly even over-the-limit fees all add up on top of the principle balance, causing them to sink further into debt. Even those who previously kept their card balances low may have found it necessary to rely on their credit cards to pay for groceries, utilities, gas, and other basic living expenses. As credit card balances swell, so does the stress. Some even struggle to keep up with their minimum monthly payments, especially if trying to pay several different cards.

Consumers seeking credit card debt solutions have various options, from balance transfers and debt consolidation loans, to professional help from a debt relief company if the problem feels too overwhelming to overcome on their own.

You might be able to tackle the problem yourself using the self-help tactics in Step One. If that plan of action isn’t sufficient, consider the suggestions in Step Two and Three, depending on the severity of your credit card debt. 

Step One: Self-Help Tactics to Pay Down the Balance

If you’re still able to make credit card payments, but are concerned that the balance is spiraling out of control, check the interest rates on all your credit cards and try to pay down the one with the highest interest rate first. See if you can:

  1. Stop charging new purchases to your credit card(s). Paying-as-you-go on a cash basis makes you more aware of how much you’re spending, so it’s easier to stay within budget rather than be tempted by a splurge! Even a good deal won’t be such good value by the time you’ve paid months of credit card interest on it. The Care One Budget Planner can help you set a budget.
  2. Pay more than the minimum monthly amount. The article Reduce Your Credit Card Debt and Save Money explains how paying more than the minimum due by even $10 a month knocks down debt much faster, and leaves more money in your pocket in the long term. To calculate the benefits of this credit card debt solution, use theWhat will it take to pay off my balance tool.
  3. Make credit card payments early rather than waiting until the due date. This article explains how to Pay Early and Pay Less by saving on finance charges.

Step Two: Balance Transfers and Personal Loans

If the credit card debt solutions in Step One aren’t enough to handle your debt, other options include:

  1. Find a lower interest rate credit card and transfer your balances from other cards. This type of do-it-yourself consolidation can be helpful for some people looking for a credit card debt solution, but it’s important to check offer terms to ensure the fee paid for the transfer doesn’t outweigh the savings on interest. Also, bear in mind the interest rate once the introductory period is over. Calculate how much you’ll have paid off on the balance before the higher rate kicks in, to be sure it’s a good deal for you in the long term. Be aware that card companies may put a limit on the transfer amount, which might not be enough to cover all of your total credit card debt.
  2. Find a lower interest personal loan from a lender and use that to pay off your credit cards. Caution is advised on home equity loans or other loans secured on personal collateral. If you’re not confident you can meet loan payments, you could find yourself in a worse position down the line.

Step Three: Debt Management Plans and Debt Settlement Plans

If none of these approaches suit your needs and you are still struggling to meet minimum monthly credit card payments, consider seeking a credit card debt solution with a reputable debt relief company that offers solutions such as a Debt Management Plan or a Debt Settlement Plan. One of these plans could be a viable option for a consumer who is struggling with credit card debt and has a source of income, two or more credit card accounts, and owes at least $2,500 in unsecured debt. Here’s a basic overview of the two options: 

  1. With a Debt Management Plan (DMP) you pay one affordable monthly payment to the DMP provider, to cover all your credit cards. The DMP provider negotiates the amount of that payment with the credit card companies on your behalf, and distributes the payments to them. This single monthly payment is usually easier for the consumer to manage and budget for. Other benefits can include reduced interest rates, and reduced or even eliminated late fees or over-the-limit fees.
  2. With a Debt Settlement Plan (DSP) you make a monthly payment you can afford to the DSP provider, to be held in escrow while they negotiate a reduced settlement on the total debt with your creditors. Once an agreement is reached, the funds are distributed from your escrow account and ultimately you pay off only a portion of your debt. This solution will have a negative impact on your credit.

Whatever credit card debt solution you choose, it’s vital to check the credentials of any debt relief company you work with, so as not to make a bad situation worse. If you’re considering a Debt Management Plan or Debt Settlement Plan, consult a reputable provider who offers multiple credit card debt solutions, not just one type of plan. That way they can assess your situation and help you choose which option is best for your situation. 

There is no magic credit card debt solution to resolve debts overnight. But with dedicated effort, you can soon be working your way toward a safer financial future.

The CareOne Debt Consolidation Guide provides more details on how a Debt Management Plan or Debt Settlement Plan works for those seeking a credit card debt solution.  

If you liked this you may also like:

  • 10 Ways to Get out of Credit Card Debt

    When it’s so easy to whip out a credit card every time you want to buy something, it’s no wonder so many Americans are in debt. In fact, according to Creditcards.com, the average credit card debt per household with credit card debt is approximately $15,000. Add in high interest rates on owed balances of around 14%, and consumers often find themselves struggling just to make minimum monthly payments, let alone pay down any principal.

  • Living without Credit Cards

    If you believe the credit card commercials, you're not going to be able to have any fun in life unless you use their card. Well, if you've ever carried a balance on your credit cards, you know that paying interest is no fun at all. Tack on a late fee or over-the-limit fee and the good times are really over. Although credit cards can provide immediate gratification, they're more likely to cause long-term stress in your life. Thankfully, there are alternative strategies for living life without credit cards.

  • Are You Ready for Credit Card Debt Help?

    Ten tough questions to ask to see if you are ready to make the commitment to getting out of credit card debt once and for all.

  • How to Negotiate Credit Card Debt

    For some people, understanding how to negotiate credit card debt may be a great first step for getting their finances back in order. You’ll have to contact your credit card company and know who to approach, what terms to ask for, and where to go if you need more help.

  • Reduce Your Credit Card Debt And Save Money

    Are you only paying the minimum payment each month? If you increased your payment amount every month by as little as $10, you could pay down your debt much faster.

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