Experts Advise on Credit Card Debt

If your credit cards debt is out of control, then look no further, this credit card secrets is for you. If you are struggling with your finances, you are not alone. One of the biggest challenges for young people in America is how to overcome a looming mountain of credit card debt built up over several years. The good news is that you can reduce your credit card debt and you can beat it in a few years or less, giving you a new start in your financial life. These few points are designed to give the knowledge you need to start the journey to financial freedom.

              Credit card in a nutshell               

Credit card debt is an example of unsecured consumer debt, accessed through credit cards. Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent.

The results of not paying this debt on time are that the company will charge a late payment penalty (generally in the US from $10 to $40) and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in default. The late payment penalty itself increases the amount of debt the consumer has.

When a consumer has been late on a payment, it is possible that other creditors, even creditors the consumer was not late in paying, may increase the interest rates the consumer is paying. This practice is called universal default.

Relieving credit card debt.     

Account holders can request a reduction in their annual percentage rate (APR). A survey conducted by U.S. Public Interest Research Group in March 2002 found that among its fifty participants, including people of all credit backgrounds, who contacted their credit card issuers, 56 percent received a lower APR. On average percentage went from 16 percent to 10.47 percent.  

Few strategic points that will enable you to get out of credit card debt in a twinkle of an eye.

1. How did I first get into debt?

This is the first question you must ask yourself if you want to prevent this mess from repeating itself. This will enable you to do all within your capacity to avoid buying things on credit which always result in accumulation of credit card debt.

2. Don’t pick a card you can’t handle.

Not all cards are created equal, so you should shop around with the one that best fits your situation. Look for credit card that has no annual fee, a low rate and a few additional benefits, like a cash back program.

3. Don’t carry your card to the bar.

You at least need to set limitations on what you will  use the card for. For example, don’t charge frequent, small items like groceries, dinner bills, and bar tabs to the card. You will hit your monthly limit in a week that way.

4. Don’t settle for the minimum payment.

Minimum payments are really only meant to keep people paying interest for more years than needed. If you are merely paying the minimum, you are hurting your bottom line. In the economic inquiry study, researchers found that when the minimum monthly payment was raised just a little, people ended up paying back even more which resulted in getting out of debt quicker.

5. Don’t fall for scams

 Whenever credit companies send a check along with your monthly  statements, lending you a hefty amount of money to use up front.”Just shred the check if you don’t want to incur more debt. It is called cash advantage and basically allows you to borrow a large chunk of money from the lender that has an extremely high interest rate tacked on to it.

6. Work over time

Doing over time work is one of the ways of you getting rid of your hefty credit card debt. Your must intensify your effort to meet up with a specific target in order to quickly write off your debt.

  If this article has been of help to you in any way or if you feel like making your own contribution to the listed points above, kindly post your comment below and I shall be glad to chat with you.

  GOOD LUCK!