Eliminating credit card debt could get easier, How?

Few experiences feel better than winning at credit card debt reduction. Here are ways of dealing with huge credit debts effectively.

Stuff happens that may get you taking a new credit card loan. Perhaps you need to pay down a medical bill. You may have to make emergency home improvements.

Or, you find you need to top up your savings to get that new car for work.

Credit card debt can be a good thing when it remains manageable. But what happens when you are feeling overwhelmed, desperate, and overstretched by it?

The smart solution is to use affordable ways to reduce your credit card debt.

In early 2020, WalletHub reported that Americans cleared more credit card debt in Q1 and Q2 than they ever have within similar periods for the last 34 years.

More people are doing it, so you can as well.

But where do you start?

Here are five ways to start eliminating credit card debt from today:

1) Withdraw savings from your retirement fund

Only opt for this strategy if your debt situation is extreme.

You may also face more tax liability and penalties for early withdrawal if you’re below 60 years.

The minimum penalty you can face is a 10% tax.

However, it will also depend on how you use the money and the retirement fund you withdraw the money from.

Again, keep in mind that the dividends and interest you would have earned from your savings will reduce.

2) Negotiate reduced interest rates

Can you call your creditors and ask for lower interest rates?

Yes, you can.

Paying lower monthly interest means you can make your payments faster.

They may ask you to provide some information.

So before contacting your creditors, check the current rate on all the cards you use.

Then take note of the months you haven’t made payments, your credit card score, and the duration you’ve used each account.

Also, compare the current interest rates on your cards with national rates.

When you’re done, go ahead and call your creditors to negotiate a lower rate. It is perfectly fine to feel intimidated by negotiating your credit card debt. Feel free to ask a professional credit card debt reduction company to help, if you want.

3) Cut some expenses

Now, you may need to make some sacrifices for your financial greater good—peace of mind. While you continue dealing with huge credit debts, you have to say "No to extravagent finance"

Start by reducing your monthly budget. The goal is to put more money towards paying down your debt.

That means only footing your necessary expenses and bills.

Paying your debt faster will also allow you to save money since lower interest charges will be added to the debt.

It’s worth missing out on unnecessary expenses such as Frisky Friday for a while than struggle with credit card debt for ages, huh?

4) Increase the amount you pay towards your debt

It can take you longer to clear your debts if you only pay a little amount every month.

Plus, any debt balance can increase interest charges and extend your debt repayment duration.

For instance, the interest rate was 15% in February 2020.

That means a 15% increase in your card debt monthly. So, it's essential to increase your monthly payments to bring down the interest rate.

5) Choose one debt to start eliminating

Putting a little money towards all your debts is not cost-effective. Instead, prioritize your debts and then start clearing those with the highest rates because they cost a lot.

Moreover, eliminating them first will allow you to save money on interest charges.

Just concentrate on one debt until you clear it before moving onto the next debt with the highest rate.

Doing this allows you to free up money to pay towards eliminating the remaining debts.

Over to You

There are several ways on eliminating credit card debt effectively today. You can even work with a credit card debt reduction professionals like Resolvly LLC or others, to discover more options.

Regardless of the type of debt you’ve, you can reduce or pay it off to inject more peace of mind into your financial situation. Try these strategies, will you?