How to Lose Credit Card Debt - Legally
By Paula Edwinson
There are millions of people who are 'up to their eyes' in debt. For the
majority of these people it's difficult to see a way out of the debt trap.
However, there are some practical things that can be done to alleviate the
situation. Here are some tried and tested methods:
Using credit cards to rack up a huge debt is doubtless the easiest thing
anybody can do. It may be hard to comprehend that the majority of us feel easier
handling credit cards than handling money.
Huge credit card debt has the effect of heavy and never-ending losses until
the debt is got rid of, because interest charges on credit card debt are so much
much higher than regular borrowing. One ends up losing more money paying
interest than has been spent, not to mention the inevitable effect on credit
rating when one neglects to meet up with the payments. These situations can
actually be used to benefit you if you use a little determination and follow
Bearing in mind interest charges, transfer your balances to the lowest rate
card where you could get a zero percent or much lower rate for a certain amount
of time. During this period you can deal with all your other high interest rate
debts. You should keep track of other deals with helpful balance transfers and
get ready to start the process again when the original offer is nearing its end.
In the event that one does not present itself, pay off as much as you can to
reduce the debt. Because the finance industry is so competitive, you will always
find zero percent offers available out there in the marketplace. Never forget
though, the debt has not gone away.
Another extremely useful tool that you should find effective in reducing your
burden of credit is a debt consolidation loan. These loans carry much lower
rates of interest when viewed against credit cards. It's possible to get a debt
consolidation loan at a lower rate and do away with all the debt. Just be
certain that your repayments are always punctual so that your credit rating does
not get even worse than it already is.
Another way of reducing credit card debt would be to employ some self
discipline. Clearly this is easier to say than to achieve, but the only workable
way out of your predicament is to destroy your credit cards, so that there is no
temptation to spend unless you have the extra money to spare.
You can save yourself much trouble (and extra cost) when it comes to late
payments so try to set up some kind of automatic payment, otherwise you may be
tempted to put your credit card bill on a pile and get around to it when you
have 'more time'. The big drawback with this method, before you know it a few
weeks will have gone by and you've been stuck with a late payment. If you leave
it until the deadline to send payment, you might find that it won't get there by
the deadline. Never forget though it's not a deadline for sending the money,
it's a deadline for the credit card company to receive it.
Paying late is a big mistake for a few reasons. You will definitely be
charged a late payment fee and your late payment will go on your credit report
for everyone to see. You may also find that you lose the beneficial rate you had
and your debt will be automatically put onto the worst rate that the company
If using the mail you should ensure you post your payment at least a week
before the due date. If you've left it to the last minute, ring them up and try
to make payment over the telephone.
Ever heard of the old saying: closing the stable door after the horse has
bolted!? You may think that this article is that idiom personified. However,
when it comes to credit card debt, I do believe that the saying should be
modified to: closing the stable door before any more horses bolt!
About the Author
Paula Edwinson is a finance counsellor. She runs an information website on
How to Eliminate Credit Card Debt
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