You’ve been told time and time again to avoid credit card debt. You know it’ll drag you down, but that doesn’t stop you from pushing the limit.
If you’re swimming in credit card debt, there’s something you need to know: you’re not alone. There are millions upon millions of people in the same position as you.
According to recent reports, the average American has a credit card balance of $6,375. It doesn’t matter if you have more or less debt, nothing changes the fact that you want to eliminate it as soon as possible. Doing so will lift the weight of the world off your shoulders.
Here’s the problem: you’ve been trying to make progress, but nothing seems to work.
If you’re at a standstill and searching for ways to reduce your credit card debt in the near future, here are five strategies to consider:
- Debt Settlement
Depending on your balance and personal situation, you may be able to settle your debt for less than what you owe.
Getting started is as simple as contacting your credit card issuer, explaining what you’re up against, and asking if there’s any option for settling your debt.
It’s likely that you’ll have to speak to a specific person, so don’t stop your search prematurely.
If you’re interested in debt settlement, be ready to make a reasonable offer – and promptly pay if your issuer agrees.
- Balance Transfer
Do you have debt spread across multiple credit cards? If so, a balance transfer credit card could be the answer to your prayers.
This is a form of debt consolidation that allows you to bring most or all your credit card debt under the same roof.
With one credit card, you’re now able to better manage your debt. Not to mention the fact that most balance transfer credit cards have a zero percent introductory interest rate that lasts anywhere from 12 to 24 months.
Tip: there are hundreds of offers to consider, so be careful when you choose a balance transfer credit card. You want to get the one that’s best for you and your current financial situation.
- Ask for a Lower Interest Rate
Maybe your credit card issuer is against the idea of settling your debt. Even so, it doesn’t mean that you have to stop all negotiations.
The biggest issue with credit card debt is the way that it grows, which is due in large part to the interest rate.
If finance charges are dragging you down, negotiate a lower rate with your issuer. Even if you only shave a few percentage points off your rate, it can go a long way in saving you hundreds or even thousands of dollars.
Tip: if you have a good or excellent credit score your issuer is more likely to comply.
- Pay Off the Most Expensive Debt First
If you opt against a balance transfer credit card, you need a plan for individually paying down your debt.
By paying off the most expensive debt first, you’ll give yourself the confidence you need to continue forward. Also, as you pay off one debt, you can then apply the extra money to your other balances.
- File for Bankruptcy
If you’ve tried everything else and can’t seem to get your footing, you may want to learn more about bankruptcy.
This is a big decision, as filing for Chapter 7 or Chapter 13 bankruptcy will affect your credit for many years to come.
However, if nothing else is working, this is a strategy to consider.
For example, Chapter 7 bankruptcy allows you to discharge some or all of your debts, thus giving you the opportunity to start fresh in the future.
Bankruptcy is the last resort, but you may have no choice but to go down this path. If it’s something you want to consider, learn more about the pros and cons before you make a final decision. You don’t want to regret your decision at a later date.
When you look at your credit card balance, you may find it hard to believe it’ll one day be gone.
As frustrated as you may be with your current situation, it’s important to understand that there are options available to you.
By using one or more of the strategies above, you’re putting yourself in position to eliminate your credit card debt. Once that happens, you can then implement a plan for avoiding the same trouble in the future.