I have personally been trying to eliminate my Credit Card Debt for over a year now. I have about $7,000 on a few different credit cards. Not enough for a Debt Settlement Program or Debt Consolidation, but enough to make me uncomfortable with having it. The credit card debt isn’t costing me that much money but I know that about $1,000 of it is at a 15% interest rate which gets tacked on every month.
The interest rate of 15% is what keeps me worrying about getting rid of my Credit Card Debt. So every month 15% of my 1000 balance is $150 being added to the already existing $1000. That is a lot of money when you consider it over 5 months. The money is even compounded each month so that the next month they would tack 15% on to the original balance. By the fifth month, if I wasn’t paying down the balance it would grow to $1,749. That $1000 is now costing me way more then I had originally intended.
The fundamental part of eliminating your credit card debt is to understand that the financial depletion that it causes. Someone with lots of credit card debt has to be aware of the problems that it is bringing them. This can run just inline with someone who is trying to quit smoking. Why would someone quit if they didn’t know how bad it was for them? People who smoke typically aren’t around people dying from lung cancer. This is a rough comparison but, the same could be said about people who spend lots of money on their credit cards. These people don’t know how much damage they could be doing to their financial situation. They might have a better understanding if they were forced to listen to people who were going into bankruptcy. The bottom line is that you have to understand there is a problem before you can fix it.
After one realizes that they have a problem with their credit card debt, they have to look at where the credit card debt came from. Once someone knows where the debt came from they can take actions to eliminate it. I will use a sick person as an example again. If someone comes into the hospital and is very ill the first thing the doctors do is try to figure out where the most pain or more threatening injury is. If the person has something wrong with their heart or lungs, they will most likely try to fix that first. This is a dramatic example but it hits the point. Take a look at your credit cards and see which card is the most threatening to you.
While your credit card debt won’t kill you, you should still look to see which one is affecting you the most. The easiest way to see where you are hurting the most is to look for two things.
- Look for the highest balance you have on a card.
- Look for what the highest interest rate you have.
This might not be the same card. You might have a card that has a $10,000 balance on it but has a 5% rate. The other card you have might only have a $5,000 balance, but is at a 15% interest rate. This second card is the card that you would want to pay off the fastest because it costing you the most money because of the high interest rate.
Focus all of your energy on getting this card paid off as soon as possible. Stop spending money on this card and pay it down in as big of chunks as you possibly can. Try not to use any of your credit cards while you are trying to eliminate your credit card debt. If you absolutely have to use a card, use the one with the lowest interest rate. This is the best route to paying off your credit card debt.
If you find that you are only able to make the minimums on these cards then you should consider speaking to a debt consolidation representative like michigan debt relief, tennesse debt relief, or virginia debt relief about their debt settlement program. These programs are for people who ask themselves these two questions. 1. How much am I paying out a month in interest? 2. Where will I be in 3 years from now if I continue paying what I am. If you will be in the same place you should consider debt settlement for your credit card debt elimination.
