How Credit Card Debt Elimination Will Prevent You From Filing For Bankruptcy

Credit Card Debt Elimination

credit card debt eliminationBeing in debt and mismanaging finances can place a person or even an entire household in a difficult position. In order to free oneself from debt, a lot of individuals consider filing bankruptcy. The recent revisions in bankruptcy laws have changed the situation. With these new laws, it is not as easy for people to be debt-free via bankruptcy. Still, there are still some people and circumstances to which bankruptcy is applicable. However, the effect that bankruptcy brings can last for years. When thinking about filing for bankruptcy, one should first find other options to eliminate debt. Here are three credit card debt elimination strategies which may help.

Credit Card Debt Elimination = No More Credit Card Usage!

Those who do not file bankruptcy have different decisions to make. For example, one person who has amassed 20,000 of debt is in a different position to someone who has 5,000 of debt. The one who has a smaller amount of debt may be able to pay the balance owed without even filing bankruptcy. The person who has $20,000 amount of debt doesn’t have to file bankruptcy, but they would have to make a huge personal sacrifice to eliminate their debt.

If  you are in really serious about credit card debt elimination, credit card usage should be limited. Actually, if one can help it, stop using credit cards at all. Another tip is to pay more than the monthly minimum. Do you know that monthly minimum payments hardly cover additional finance fees? In order to be able to reduce balance significantly, pay the required minimum amount monthly and add $50 or $100 more.

A successful credit card debt elimination plan is rooted in one’s discipline and sacrifice in just using cash to pay for living expenses and necessities.

Credit Card Debt Elimination Options


Request Lower  Interest Rates

If negotiation with the creditor is possible, grab the opportunity to seek lower interest rate. Usually, this can be asked if one has been a good payer to the credit card company.

When asking for a reduction of interest rate, it is best to put the best foot forward. Having a good history of credit and repayment may be able to convince the creditor to reduce interest rates.

Credit score also plays a role when a creditor considers interest rate reduction. A low credit score might need the assistance of debt consolidation agency.

Once your interest rate is lessened, is it much easier to reduce the outstanding balance. This is because your financial fees will be significantly lessened.

Refinancing or Home Equity Loan

Homeowners have an advantage when trying to eliminate debt. Why? Because values of homes increase through time, therefore owners gain equity on their property. When one is a homeowner, it is possible to tap into the property’s equity. Refinancing a home or getting home equity loan will enable the owner to have a considerable amount of money which can be utilized for debt consolidation.

These are just a few debt elimination strategies which can be included in your credit card debt elimination plan. Remember, managing finances properly can lead to a debt-free comfortable life. So click on the link below to see how credit card debt elimination can help get out of debt.

3 Debt Elimination Strategies- How to use Free Money to Reduce Debt

Here is article I found that provides 3 debt elimination strategies to eliminate debt using free money!

Free money is sitting in your finances now, just waiting to help you reduce your debt. Without paying more, you can get out of debt sooner by reducing your interest rates on debts. Using a payback credit card can also help you earn money. And finally, budgeting your purchases will help you stay on track to paying off your debt.

Reduce Your Interest Rates

Reducing your interest rates on short and long term debt is the easiest way to reduce your debt. You can transfer credit card balances for better terms. You can also opt to consolidate debt into a low-rate home equity or personal loan.

To get the most benefit of your freed up money, make the same payment on your debt. Making extra principal payments will help you trim your debt load in no time and you won’t feel a pinch in your finances.

While you have those accounts paid off, consider closing those accounts. Keep the oldest credit lines since they benefit your credit score. However, new accounts could needlessly be restricting your credit options in the future.

Get Paid For Using Your Credit Card

Credit card companies compete through their rates and incentive programs. With payback rates up to 5%, you can be earning extra dollars each month by paying your regular bills or buying groceries.

To get the most, use the card to pay for your everyday purchases. Then pay off the entire balance each month. That way at the end of the year, you will have a sizeable check coming your way. Take that free money to eliminate part of your debt principal.

Cash back credit cards usually have higher rates than other accounts. So if you are planning to carry a balance, shop for the lower rates.

Budget Toward A Goal

Trimming expenses from your budget can also help you find free money in your account. For example, late payments on bills are a needless waste of money. Switching to automatic payments can help avoid this cash loss.

When you do look at your budget, plan toward a pay off goal. How much money a month do you want to put toward your debt? Write that check at payday so you won’t be tempted to spend it. Then make the necessary budget adjustments, knowing that you are getting close to being out of debt.

See my recommended Debt Reduction Companies online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder

3 Fool Proof Debt Elimination Strategies to Get You Out of Debt

Here some great debt elimination strategies I found on Debt Free Destiny that will help you eliminate debt. It basically points out three basic steps you will need to do to get out of debt.

There are three basic steps you’ll need to take to eliminate your debt.  The most important step can be accomplished starting right this minute, and will be the most important thing you can do to keep yourself debt free for the rest of your life!

Step One: Stop Using Credit, Stop Applying for Credit, Stop Generating New Debt

You might be surprised at the number of people who say they are trying to get out of debt yet they continue to pull out a credit card when shopping or paying for expenses, or who sign on the dotted line for financing furniture or any other purchase.  If you want to eliminate debt you have to stop using credit, it’s that simple.  You can’t get out of debt if you continue to add more debt.

Think you need a credit card for emergencies?  Think again – it’s probably those very credit cards that put you in this situation to begin with, and the fact that you used them for an emergency and now have that debt to pay back is why you don’t have money for the next emergency that presents itself.

Go through your credit card statements and find any recurring payments you’ve set up that use the credit card.  Gym memberships, Netflix, Gaming sites – anything that charges to the credit card automatically needs to be “turned off” at this time.  If you have to keep whatever service you were paying for on the credit card, have the bill sent to your home or have it deducted from your checking account. Stop using credit.

Contact your credit card companies and ask them to lower your interest or offer you a better deal on repayments.  It doesn’t always work but it’s worth a try.  Don’t cancel your cards though, as it can lower your credit score.  Keep them open – but don’t use them!

Step Two: You Need An Emergency Fund

When you stop using credit cards, you will need to have some money to pay for unexpected or emergency expenses.  The reason you may have gotten into credit card debt in the first place may have to do with an unexpected expense and a lack of savings – so you really need some money set aside to prevent this cycle from continuing.

Try to save about $1,000 as quickly as you can, while still making minimum payments to your credit cards and other debts.  Put the money in an account you can access fairly easily, but don’t tie it to the account you use all the time with a debit card or you’ll be tempted to use it.  Set aside $25 or $50 a week – whatever you can afford while making minimum payments until you have saved $1,000.  Cut back all unnecessary expenses (eating out, gym memberships, new shoes, etc) until you have this emergency fund established.

Step Three: Have a Snowball Fight With Your Debt… and Win

You’ve stopped using credit, you’ve got about $1000 saved in an emergency fund and now it’s time to eliminate that debt once and for all!  There are a few popular methods for getting out of debt – you can use the Dave Ramsey method of paying the smallest balance first to generate momentum, the highest-interest rate method to pay less in total interest, or the debt avalanche method, as coined by ConsumerismCommentary.com.

The most important thing you can do for your financial future is to eliminate your debt.  Start right now – don’t put it off like a diet during the holiday season!  The sooner you start, the faster you can make a difference to your financial situation.