How Do I Get Out of Credit Card Debt?

For many people, getting out of credit card debt is important. Unfortunately it is much more difficult to get out of debt than it is to get into it. At the same time, with a solid plan of action and a lot of perseverance, it is quite possible to do. Getting out of credit card debt is one of the smartest and most responsible things you can do in any economy. Of course, this is easier said than done, but it is definitely possible if you can formulate a feasible plan and stick with it until you accomplish your goal.

If you are like most people, you probably feel like now is as good a time as any to get out of credit card debt. If that is true, then it is also probably true that you might need a little help getting started.

It doesn't matter how the economy is going, it is always a good idea to evaluate your credit card debt and try to reduce it or get out of it completely. There are several things you have to consider, though, if you want to do this.

Credit Is A Tool

First of all, credit card debt is not necessarily bad debt. Granted, you probably have more than one card that you don't need, but that doesn't mean that you simply have to get rid of all of them. You need to establish and maintain good credit if you want to be able to get larger loans for the purposes of buying a house or car. Sometimes you need decent credit, as well as an active credit card, to book hotel rooms or to complete a rental car agreement.

Start With What You Can Manage

Most people only have as much credit as their budget will allow. After all, responsible lenders will only let you have an affordable amount of credit. No matter how big or small your total credit card debt might be, trying to shrink it down to make it disappear will always depend on what you can afford to pay towards your monthly statements. If you want to make a dent in your total credit card debt, you will need to be able to pay more than the interest and fees will add at the end of the month. Of course, this means you should stop using your cards altogether.

Consolidation And Balance Transfer

In terms of saving money, transferring your existing balances and consolidating your credit cards can be a good idea, but you need to understand the stipulations of the new credit card first. The benefits are:

• One interest rate instead of multiple
• One monthly payment instead of multiple
• Lower total payments every month
• One set of fees or penalties
• One bank to deal with if you have problems or questions

When you have multiple cards, you have to make several payments every month, and the total for these payments is probably much higher than what it would be with a single card. Similarly, though, there are also a few detriments to consolidation:

• Increases your credit liability which actually hurts your credit score
• Is only available for a limited time

Indeed, many balance transfer programs are only beneficial for a short period of time, which means you may have to increase your payments in order to take advantage of the lower rates. If you can do this, though, it is definitely possible to reduce and get rid of your credit.

Conclusion

Credit is sometimes very important, but most people probably have more than they need. Whether you decide you to reduce your credit card debt or get rid of it completely, you need to know that it might be difficult, but it is certainly possible.