What is the best advice for clearing credit card debt?

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Are your debt collectors calling like crazy?  Do you feel weighed down by credit card bills?  Do you have many that are late?  We will discuss strategies for getting rid of sky-high balances on all sorts of loans.  We think you owe it to yourself to finally be free of these debts.

Are you constantly just paying the minimum payment that’s due every month?  Do you find it a good idea to pay the smaller amount and you’re off the hook for this high bill for a little bit?  There is 45 percent of Americans who know for sure, by now, that the compounding charge usually bites you where the sun doesn’t shine.  For an example, Susan owes $1,600 in debt which is the average household debt for many Americans.   The interest she will accrue an amount of $11,000 if she pays minimum payments for the remainder of the time, and that’s without ever missing a payment.

You need a plan to help you at reducing your debts that may be running at high-interest rates.  We know there are good reasons and sometimes life just happens.  Maybe you lost your job.  Maybe a high-priced purchase was needed in a moment when you had no other choice.  Whatever your reason, get started of ridding yourself of these debts right away.

5 strategies to help you clear your credit card debt

If you are really hurting financially, may two minimum payments a month

Credit card lenders will charge interest on a daily basis, well most of the companies will but not all.  Your average daily balance will be lower if you make your payments sooner.  The faster this debt is reduced, the fewer amount of interest that you pay as a whole.

It is easiest if you put a reminder on your phone and notify yourself to make the two minimum payments monthly, and on time.  Doubling this payment will get you out of debt quicker.  You can also keep track if you log it in your calendar.

Say you charged 4,000 on a card with a 16 percent interest rate.  If you only make the minimum payment (which is usually 2 or 3% of the balance), it will take more than 20 years to pay off these debts.   If you double your minimum payment you will be out of debt in less than 3 years.  Isn’t that incredible?

One Card at a time

If you are carrying very high balances on your cards and have quite a few in your wallet is a long journey to wipe out all the debts at once.  Give yourself a little excitement when you pay off one card at a time.  Getting that boost of gratification, in the beginning, will give you major reasons to keep working at chipping away at your debt.  It may be time to ask yourself what kind of short-term financial goals will make you feel like you are making huge progress in reducing your debt.

Is your answer that you want at least one card completely paid off.? This is when you throw as much money as you can at the card with the lowest balances first.  You should do this even if you need to only pay minimum payments on all your other high limit, high-interest cards.  This will give you a confidence boost that you are making the right choices for your future.  It starts will eliminating it all.

If your answer is that you want to boost your credit score, then you will need to pay your cards that are closest to their limit.  It is suggested to start improving your credit score by lowering your high utilization cards to 30 percent or less to start affecting those numbers.

Or do you want to lower your interest rates?  It seems like the best way to do this is to pay on your cards with the highest interest rates first.  The faster you pay these debts you will not be accruing the daily interest charges.  Double payments will definitely get you to your goal faster.

Very Carefully transfer your balance

 It seems to be a great idea to transfer your high-interest debts to another credit card lender that is offering a lower APR.  It is quite a smart move, you could save hundreds.  You need to be sure that you pay off the complete amount of debts in the introductory zero to low-interest rate window.  They usually last 12 – 18 months.  Be sure that the interest rate doesn’t skyrocket and you end up at the end of your low-interest period.  Be careful of not using your new card for new purchases because sometimes they don’t have the same weight as your transferred balance.  The point is to get out of debt, not stay in it.  You should know that you will have to pay a fee to transfer your balances from one card to another and that is usually around 4% of the balance. Before using credit card debt consolidation this may be an option.  The goal is to not have compounding interest.  Don’t pay interest on interest you have already accrued.

Ask your lenders to lower your interest rates

It may just take a phone call to your lender to have them help reduce your interest rates.  This only works if you have good credit.  Good credit is considered 730 or higher.  Lenders will be more likely to help you if you are a long-term customer but don’t hold yourself back for asking if maybe you aren’t, yet.  Even if it’s just a point of two taken off it could lead to hundreds of dollars saved annually.  Sometimes you must play some games with your lenders.  If you see that another lender has offered you a lower interest rate then be sure to tell another lender that you were offered a better rate than theirs.  More times than not they will offer you the same rate.  They don’t want to lose their customers to another company.

Use a peer to peer lender

It’s many people’s fantasy to pay off their debts in full and never have to think about them again.  If you can’t do this consider borrowing money to pay off your card from a peer to peer lender.  There are online sites that can help you with this.  The secure sites offer loans with fixed interest rates that can be almost 30 percent lower than most credit lenders that many Americans use.  You may even qualify for your online loan request for up to $25,000