Clear Credit Card Debt

clear credit card debt

Clear Credit Card Debt Today

Getting out of debt is a goal that most Americans share, but given the current economy, it’s a goal that may feel more difficult to realize each day. Fortunately, there are several different strategies to help you clear credit card debt once and for all. Read on to determine the best strategy for your current financial situation, and then take action. Remember: The best financial plan is the one that you will actually use, so take care to use these tips and formulate realistic, actionable steps towards financial freedom.

Get Interested in Interest

Like many people who hold significant debt, you probably feel frustrated by your attempts to stay on top of your payments. Each month you send off a check, but the balance never seems to go down. It’s time to take a hard look at your interest rate. How much are you being charged each month in interest and fees alone? Check the fine print. Oftentimes your credit contract allows for a rate increase after a single late or missed payment. A interest rate of 20% or higher can make your attempts to clear credit card debt feel truly impossible. Luckily, there are steps you can take to lower your interest:

Negotiate

Before making any major changes, it’s always worth calling your current creditor and ask for a lower interest rate. You’ll have a greater chance of success if you have a solid history of making payments on time. Be careful not to get pressured into a credit line increase, and always remain polite but firm. If you don’t get a lower rate, don’t give up.

Balance Transfer

One of the most common means of lowering your interest is usually right under your nose. If you’re like most Americans, you get a good deal of junk mail from competing creditors. Start opening those envelopes, especially the ones that advertise zero percent balance transfers. Look for promotional offers that give you at least 12 months of zero or low interest. Reducing interest for a year can significantly help you clear credit card debt. Be sure to inquire about transfer fees, but trust that $100-$200 up front is a small price to pay for eliminating the monthly 20-25% interest fee.

The “Snowball” Plan


If you’re not ready to transfer your balances, or if you get denied for a transfer request, you might want to try the “snowball” method to clear credit card debt. The process is simple. Organize your credit cards in descending order of interest rate. Then, figure out how much you can pay per month total on all of your cards. Simply pay the minimum required on every card then put the remaining money towards the card with the highest rate. The remaining money becomes a “snowball” that you helps you clear out your highest interest first. Once that card is paid, move to the card with the next highest interest rate, and so on. You can find a free calculator to help with this process at Vertex42.

Make a Budget and Put Your Debt On Ice

While this advice might sound simplistic, it’s important to make sure that you don’t skimp on paying your basic bills in order to clear credit card debt. Keep tabs on how much income you have coming in and make a realistic budget to account for everything from utilities to groceries to debt. Take a hard look at luxuries large and small. If you’re serious about trying to clear credit card debt, you’ll need to rethink expensive restaurants and fancy coffee drinks and focus on putting your funds to work.

Most important of all, stop adding to your debt with new purchases you can’t afford. Cut up all of your cards except one. This card will be for emergency use only. Place the card in a plastic baggie full of water, then seal the bag and place it in your freezer. If you experience a true emergency with your home, family, or car, it will be easy enough to run the card under warm water and put it to use.

Extreme Measures: Bankruptcy

If you are truly struggling to make payments on your credit cards and daily household bills, then you may want to consider filing for bankruptcy. This process will essentially clear your financial slate and should only be used in extreme cases.

No matter what method you choose, you can-and should-start working to clear credit card debt today.

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