Best Way to Get Out of Credit Card Debt
If you've thought long and hard about filing bankruptcy due to mounting credit card debt only to conclude that you don't want to go that path, you are far from alone. It's a big step, which is why many people decide to go another route. But do you know the best way to get out of credit card debt? There are a number of methods, actually. Keep reading to explore some of the most common.
Getting Out of Credit Card Debt
First of all, know that paying off your credit cards in full will take great discipline, but you can do it if you set your mind to it.
1. Evaluate your debt. Like many debtors, you may have been ignoring (intentionally or otherwise) the amount you owe and the amount of interest you've been paying. What you find may shock you, but you need to be truthful with yourself if you're going to dig out.
2. Negotiate better interest rates if you can. Some lenders would rather work with you to create a more manageable payment plan than risk having you file for a Chapter 7 bankruptcy, in which case they probably won't see any payments at all. If you're late on payments already, they may also be willing to offer a settlement at a substantial savings. Just know that if you choose to do this, you might have to pay taxes on the amount that was forgiven. This strategy will also negatively affect your credit rating.
3. Pay more than the minimum amount on the credit card with the highest interest first, while paying the minimum on the others. Once you have the highest one paid off, start paying more than the minimum on the next card with the highest interest while paying the minimum on the others. Repeat this process until your credit card debt is eliminated. Alternatively, you could follow this same formula, but pay off the card with the lowest balance first. Seeing a credit card completely paid off faster can help you stay motivated to keep going.
4. Stop using your cards, unless, of course, there's an emergency. Get into the habit of paying cash - for everything. You'll not only be saving money in the long run, but you'll also be more aware of your spending, as parting with cash is psychologically more impactful than paying with plastic. Paying cash for purchases shouldn't take long to get used to; you don't actually need to carry the green. You can also use and ATM card. Just make sure your bank balance can support your purchases.
Conclusion
These are just a few of the best ways to get out of credit card debt. Truth be told, though, many debtors will give up and fall further behind and eventually decide to file bankruptcy anyway. A successful chapter 7 bankruptcy can relieve you of most types of debt, and filing sooner rather than later can save both headaches and heartaches, not to mention money Talk to a bankruptcy attorney to determine whether getting out of debt on your own is realistic or if filing bankruptcy is a better option.
Whatever you decide, best of luck to you!
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