Reducing Your Credit Card Debt

With the high interest payments that come attached, leaving credit card debt or paying it off too slowly can be a serious financial burden. Taking the time to reduce your credit debt can make a serious difference in your credit score, your ability to get auto loans and the amount you are expected to pay. The strategy you use to reduce your debt will depend on how much debt you have and your ability to make the payments that are currently scheduled so you will need to look at your options before committing to a plan.

Paying What you Owe

The first step toward reducing your debt is to avoid racking up any more costs that you will have to pay. If you have an overwhelming credit card bill, check to see if there are any penalties for not using your card regularly. If there are, get a clear idea of how much you will have to spend to avoid these charges. If there is no cancellation or lack of use fee on your card, then stop making charges so you can focus on paying off your bill more quickly.

The longer it takes you to pay off your card, the more you will have to pay in interest. Avoid making the bare minimum payment on your credit card bill if you can afford to do so. This will give you a better credit score and allow you to pay your bill more quickly to reduce the amount of interest you will be charged. Avoid getting behind on payments so you are not charged late fees or other penalties on top of the regular bills you are expected to pay.

Reducing What You Owe

If you are unable to make the minimum payments on your account or you are falling behind with your bills, seek help from your creditors sooner rather than later. If you make it clear that you intend to pay your bill but need help doing so, your creditors will be much more willing to work with you than if it looks like you are avoiding making payments or neglecting your responsibilities. Your bill should have a number you can use to contact your credit card company if you need to set up a payment plan get your debt reduced.

When you contact your creditors about setting up a plan to reduce your debt, be blunt about what your financial situation is. Your creditors need all the information you have in order to make an informed decision as to what type of help they can offer. If possible, provide documents such as payment stubs from work, other bills you are paying or proof that you pay bills on time when you are able to help prove that you can be trusted to stick to the payment schedule they set. Also, tell your creditors what level of payment you can afford each month instead of waiting for an offer so they know how to proceed.

Many companies will go about reducing your credit card debt by forgiving some of your previous bills. If you can only afford very low monthly payments, it may take several years for you to pay off what you owe. In this case it is not unreasonable to ask your credit card company to forgive some of your debt if you promise to pay off the rest in any way you are able. Your creditors cannot help you if they are unaware of your needs so do not be shy about asking for these services if you feel they are necessary.

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