3) Get A Zero Rate Credit Card Deal.
If you decide to move lenders to get a lower interest rate, look for a special zero percent deal. Credit card companies often advertise six month introductory rates of zero percent. You'll be able to repay your debt at a much faster rate when you don't have to deal with interest and finance charges for six months. But a word of warning: Just because you don't have to pay interest for six months, don't ease up on your efforts to become debt free. In fact, make it your goal to repay as much as you can afford during these six months.
4) Consider a Credit Card Consolidation Loan.
These loans will help you to secure a lower rate of interest, which means your debt will disappear in a shorter period of time. Instead of paying credit card interest of say 20%, you'll be able to pay personal loan rates or perhaps 8% or even mortgage rates or 4-5% if you decide to secure the debt over your home.
That means your debt could be eliminated within a few years, instead of twenty.
There are dangers. Watch out that you aren't persuaded to borrow more than you already owe and make sure the consolidation loan isn't spread over too long a period. Remember, the longer the loan lasts, the more you'll pay in interest. If you get a second mortgage, be sure to understand the risk of foreclosure if your financial situation worsens and you can’t make your payments.
And whatever happens, make sure you read plenty about the process before your sign on the dotted line.
5) Never Pay Just the Monthly Minimum Payments.
If you do that, your credit card debt could take almost 20 years to repay. And due to the high interest rate, you could end up paying three times what you borrowed! Always pay as much as you can each month. If you have a number of credit cards, and you've decided not to consolidate your debt, it's a good idea to focus on repaying the card with the highest rate of interest first.
Here's what to do:
a) Compare the interest rates on each of your credit cards using the APR rates.
b) Use a debt calculator to determine the fastest way to become debt free.
c) Take the credit card account with the highest APR rate and use all your remaining cash to repay as much of it as possible.
d) Do that every month until that card is repaid.
This method will allow you to take advantage of the snowball effect. After the highest interest card has been paid off, you focus on the card with the next highest rate of interest. And as you've already repaid one card, you'll have more money to repay the remaining cards.
Every time a card it repaid, you'll have more money to repay the remaining cards. So the time taken to repay each card will get shorter and shorter (like a snowball building speed as it rolls down a hill). Keep doing this until you only have one credit card left and put all your effort into repaying it.
And finally, if things start to get difficult, just keep going. Imagine how you'll feel when you make the last repayment and you're finally free of your credit card debt. Now that's what I call
credit card debt relief!
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