Can you open your wallet and count more than two credit cards? If you said you had from 3 to 5 cards you may not be in trouble. But if you have over 5 credit cards there is a good chance you are in financial trouble or so close to it; that one emergency could send you over the edge. If that’s the case for you; perhaps its time you learn how to reduce credit card debt.
But first to confirm your suspension you’re in financial trouble because of the credit cards, you should take the time to do a quick study of what’s going on with your credit cards.
1. Do you know how much money you owe in total?
If you said no you’re in trouble.
2. Are your credit cards maxed out or very close to being maxed out?
If you said yes you’re in bigger financial trouble than you thought.
3. Are you and your significant other constantly battling over the credit card bills and other bills?
You really need to eliminate credit card debt.
4. Are you using your credit cards to buy perishable goods such as food and other staples you need to live?
That is no way to reduce credit card debt. Your just increasing your interest and balance.
5. Do next month’s bills come in before you can pay this months?
Wow! No doubt you need to know how to cut your credit card bills back.
If you find the above questions describe your situation you have got to reduce your credit card debt. Your next question to yourself is “How do I eliminate credit card debt?”. Actually you have several alternatives available to you.
A. Make a list of all your credit cards
• Include Balance Owed, Interest Rate, Minimum Payment
• Put the highest balance and Interest Rate at the top of the list
• Stating at the top call each credit card company and negoiate lower interest rate, late fees and over limit penalities.
• Speak only with management.
• Get new terms in writing
By doing this you will find many of the credit card companies will lower the interest rate and waive the late fees and penalties. This in turn will decrease the monthly interest charged and free up additional cash to make further reduction of your monthly balances.
This method of reducing your credit card debt works best before you start making late payments or missing payments completely. By doing so you will be able to show the management of the company you are honestly trying to prevent a sticky situation. Although some of the credit card companies will work with you, not all of them will.
In the case they don’t want to work with you then you may have to consider an equity loan on your home to consolidate your debts. However, it’s very important to make sure you don’t end up with a loan rate that will cost you more money over the long term. Chances are though your mortgage company or bank will make sure it will be a better rate and you will have it paid off long before you would the credit card debt.
This one solution alone could save you several hundred up to perhaps a thousand dollars in monthly credit card payments. The key to this plan is to use the money you save to reduce the amount owed on the home equity loan. By doing so you may well save thousands in interest and pay the loan off say in five years, instead of the 10 year term of the loan.
By the way if you should get a home equity loan, don’t make the mistake of loading your credit cards back up. You should cut up all your credit cards except one or two to keep for emergencies.
Make sure the ones you keep have the lowest interest rates and keep them paid up in full.
There are other alternative solutions to reduce credit card debt. It will behoove you to take the time to determine what your best solution is.
Talking Odours 