10 Easy Tips so You Can Pay Off Monthly Credit Card Bills, Charge Cards, Installment Loans and Get Out of Debt
You CAN get out of credit card debt
. For sure, those installment loans, monthly credit card bills, charge cards and other loan debt make you feel trapped. If it seems like your monthly bills have you backed up against a wall, there are steps you can take to get out of credit card debt. Managing your credit card bills, charge cards and installment loans is the key to escaping from installment debt. No matter how irregular your income is, or how broke you are, it is better to face your credit card bills squarely than to deny the problem. Take heart. Fortunately, in this country, no one is sent to prison for not paying credit card debt.
To pay off those monthly credit card bills, charge cards, Mastercard, Visa, store bills and installment debt
, change the way you think about monthly bills and your credit card debt. No matter how easy it is to get into credit card debt, borrowing and monthly installment loans should not be considered a way of life. Changing the way you spend money is the first step out of debt despair. In other words, you bring in a certain amount of money each month, and when it's gone, it's gone. Accepting that reality is the key to living a happier, wealthier life. If you are swamped, and want to pay off credit card bills, charge cards, store credit cards, and installment loans, borrowing more money on your credit cards is not the best plan. Follow these steps to pay off your credit card debt, loans and monthly bills fast.
- How Much Credit Card Debt Do You Have to Pay Off? Total Your Monthly Bills
- Make a Budget to Pay Off Monthly Credit Card Bills
- Get Rid of Your Credit Cards, Charge Cards and Loan Cards
- Negotiate Your Monthly Credit Card Bills Down
- The Online Monthly Installment Credit and Debt Payment Calculator
- Get a Personal Loan to Pay Off Your Monthly Credit Card Bills
- Should You Refinance Your Home to Pay Off Credit Card Bills
- Refinance Your Car to Pay Off Monthly Credit Card Bills
- Sell Your Home to Pay Off Monthly Credit Card Debt
- Credit Counseling Can Pay Off Credit Card Bills
- Debt Consolidation to Pay Off Charge Card Bills
- Will Debt Management Plans Get You Out of Credit Card Debt
- Debt Negotiation Programs to Pay Off Monthly Credit Card Bills
- Bankruptcy to Pay Off Monthly Credit Card Bills Debt
- After You Get Out of Credit Card Debt
How Much Credit Card Debt Do You Have to Pay Off? Total Your Monthly Bills
Before you do anything else with your credit card debt
, list your financial obligations so that you know where you stand. Your list should include lender’s name, balance owed, rate of interest, late payment charges included in the balance and the minimum payment. Total up the credit card debt you owe and total all the minimum monthly payments.
How much credit card debt is too much?
If your total monthly payments, including your home mortgage payment, exceed 36% of your monthly income, you’re carrying too much debt. Credit card companies are getting rich off of you.
Make a Budget to Pay Off Monthly Credit Card Bills
The next step to get out of credit card debt is to prepare a baseline budget
. A budget is a simple list of the money you need every month to meet your basic living expenses. Your baseline budget will include rent, utilities, car insurance, housing expenses like mortgage payment, property tax and insurance, costs to get to work, medicine, and basic food. The baseline budget total tells you how much money you need to live without any luxuries. It doesn’t include pizza, fancy food, dining out, clothing, impulse purchases, entertainment, vacations or cable TV. None of these things fit into a debt-reduction budget. Your lifestyle must be revised to include brown-bag lunches and value-priced groceries.
The purpose of the baseline budget
is to remind you what you need to get by and how much of your take-home pay can be used to get out of credit card debt. Put your baseline budget into practice right away. The baseline budget is your first brave step to take charge of your money and get out of credit card debt.
To Get Out of Credit Card Debt
You can get out of credit card debt
Pay More Than the Minimum
if you make more than the minimum credit card payment each month. Living within your baseline budget will free up enough cash to make all the minimum monthly payments on your credit card debt. After you make the monthly payments, record the new, lower balance on your list of debt. Always make your credit card payments as soon as the bill comes, to avoid the exorbitant late fees and the interest on those late fees. If you pay more than the minimum every month, you'll get out of credit card debt quicker and you'll pay less interest.
After you've made the minimum monthly payments
on each credit card, use the money you have left to pay off the most expensive credit card balance first. You could be paying interest as high as 28% on some cards. When the balance on the first credit card is paid off, you’ll have more money available each month to pay on the second highest credit card, and so on until your credit card debt is paid off.
When you get out of credit card debt, try to pay off your car loans, bank loans and other debt. Apply all available cash to pay off the most expensive of these loans. Finally, pay off the debt with lower interest rates and income tax benefits, like student loans, and then your house mortgage.
Get Rid of Your Credit Cards, Charge Cards and Loan Cards
One of the easiest ways to get your spending and credit card debt under control
is to eliminate your credit cards. Credit card debt abuse is one of the leading causes of consumer indebtedness. Eliminating credit cards from your life is a good step to control your spending impulses. Another step is to avoid any new credit card debt or loans. Taking out additional loans is counterproductive. This includes buying anything that will require future payments. You shouldn’t buy a new car or any other item on time. Even when stores offer terms like “no payments and no interest for two years,” you are, in-fact, making a loan.
Get Out of Credit Card Debt
If your credit card debt includes
Negotiate Your Credit Card Debt Down
hospital and medical expenses that you are unable to pay, you can ask the hospital for special consideration. Hospitals routinely waive payment for people who are in financial distress. You should call the hospital and the physician’s billing service. Be prepared to explain your circumstances, whether it is a lost job, lost insurance, or misfortune. Swallow your pride and ask for help.
Credit card companies
will sometimes reduce your interest rate if you ask them. You can easily take this step yourself. Just call your credit-card company and tell them what rate you were offered in a mailer. Ask them to match that rate. Credit card companies will offer lower rates to keep customers who may be transferring their outstanding balance to another credit card company. Sometimes, customer service people are authorized to reduce your interest rates right there on the phone. But, if the first answer is no, ask to speak to a manager. You will have extra bargaining leverage if your payments have been on time and your credit history is clean. Be aware, if you authorize the credit card company to check your credit report, the credit card company might actually increase your interest rate.
Does your credit card bill include late payment charges?
If those late payment charges resulted from conditions beyond your control, you can call and request that they be subtracted from the balance you owe, along with the interest that accrued on them. If the phone call doesn’t get results for you, write a letter requesting the same thing.
The Online Monthly Installment Credit and Debt Payment Calculator
This online debt planner for credit card bills, charge cards and installment loans
is provided to help you pay your monthly credit card debt. It is easy to understand and use. It will help you with you manage your credit card debt. The credit card debt planner lets you choose the amount of your monthly payment, and tells you when your credit card debt will be paid off. The planner asks for the same information on the list you prepared in Step 1 above, that is, your amount of debt, the monthly interest rate and the minimum payments required. If you want to pay more than the minimum payment, decide how much you can afford each month. The planner will tell you when the credit card debt will be paid off and what your total cost in interest and fees will be. Before you consult a credit counselor, try to pay off your credit card debt on your own.
Get a Personal Loan to Pay Off Your Monthly Credit Card Bills
You can pay off your credit card bills
by getting a personal loan. A personal loan from a bank will have a lower interest rate than your credit cards. The net effect is to reduce the interest rate you pay on the debt. If you are employed and you have reasonably good credit, you may qualify for an unsecured loan. The available interest rate, say 10%, will be much less than credit card rates, which can be as high as 30%. Resist the temptation to borrow more than you need to pay off your outstanding loans and credit cards debt.
Should You Refinance Your Home to Pay Off Credit Card Bills
Another way to reduce pay off your credit card bills
is to do a "cash-out" refinancing. If you have equity in your home, you have the option of refinancing your property for more than the amount you owe and using the extra cash to pay off charge card bills and other monthly installment loans. You will get lower interest rates on a home refinancing and you'll pay less interest over time, but you’ll be stretching payments out over 15 or 30 years. The total interest cost over three decades can wind up being as much as the amount you borrow, and refinancing usually can be done only once. Remember that if you fail to make the required payments, you could lose your home. Resist the temptation to borrow more than you need to get out of credit cards debt.
Refinance Your Car to Pay Off Monthly Credit Card Bills
Most people don't think of it
, but you can use your car as collateral for a loan. Then use the loan money to pay off your installment credit card bills. The interest rate on a car loan will be much less than credit card rates, to this will save you money. Of course, if you don’t make the loan payments, your car can be repossessed. If you are driving a newer car with an outstanding loan, it is likely that refinancing is not an option because the present loan balance already exceeds the value of the car.
Sell Your Home to Pay Off Monthly Credit Card Debt
If your house is worth more
than you owe on it, selling your house will give you cash in your pocket to pay off credit card bills and other debt. Selling your home is a hard decision, and not lightly made. Note that if you choose instead to file bankruptcy, you may be able to keep your home. Get professional advice when you consider this option for getting out of credit card debt.
Credit Counseling Can Pay Off Credit Card Bills
If you cannot pay off monthly credit card bills
on your own, or you can’t keep track of your bills and debt, contact a reputable credit counseling agency. Ask someone you know and trust to recommend an ethical, reliable one. For help finding a credit counselor, visit the website of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.
Before you sign up with for credit counseling
, find out what they charge and if there is a cost for the initial meeting. Get their fees in writing. Many credit counseling organizations are nonprofit and will work hard to help you solve your financial problems. But be careful when you use a credit counseling
to get out of credit card debt. Just because an organization says it's “nonprofit,” that doesn't mean its services are free. Some credit counseling organizations charge high fees, or have hidden costs, or may lead you into further debt through bad practices.
A reputable credit agency
can advise you on developing a budget and managing your money with free educational materials and personal counseling. Their counselors are certified and trained in the areas of consumer credit, budgeting, and debt management. They will discuss your entire financial situation with you, and help you develop a personalized plan to get out of credit card debt. Credit counseling can set you on a new path to better finances. But you are not going to get out of credit card debt overnight. You will still have to get control of your spending.
Debt Consolidation to Get Out of Credit Card Debt
Debt consolidation means that you make a new loan
, and use the money to pay off your existing credit card bills
. The new loan will have lower monthly payments, which are easier to meet. But the new loan will take a lot longer to pay off, and it will wind up costing you a lot more than your present loans. You can use a consolidation loan to pay off your current monthly credit card bills, and to pay off personal loans, home-equity loans, car payments, and, if necessary, mortgage debt.
As you take steps to get out of credit card debt
not to believe everything that’s advertised. Many ads for loan consolidation and credit services are misleading come-ons to bring in new business. You may be digging a deeper hole for yourself. Companies may not make the payments as they've promised. They may negotiate to lower the balance owed, but you won't get the benefit. Meantime, their activities could lead to negative entries on your credit report. Be aware that these loans may require you to offer your home as collateral. So, if you can't make the payments on time, you will lose your home. Also, the costs of consolidation loans usually include interest or “points.” One point is equal to one percent of the amount you borrow. You should know that some debt consolidators require that you give up your right to include these debts in bankruptcy
. Your local bank is a reliable safe place to go for a debt consolidation loan.
If you have not been making the required monthly payments on your credit card debt
, debt consolidation will not put any more money in your pocket. You still must take drastic steps to pay off credit card debt and live within your means. In order for debt consolidation to improve your financial situation, you need to break the debt cycle. Simply put, that means that you need to stop spending money that you haven't earned yet.
Will Debt Management Plans Get You Out of Credit Card Debt
A Debt Management Plan to get out of credit card debt
is different from a Debt Consolidation Loan. The DMP is drawn up by a credit counseling organization to pay off credit card bills over a long period of time. The fee charged for a Debt Management Plan can be substantial. The DMP requires that you send the planners money every month and they will use it to pay off your monthly credit card bill, charge cards and installment loans for you. They may also negotiate lower interest rates for you. Your monthly payment will also have to include their fee. Again, there are no guarantees. No one will look after your money like you can. You are your own best and safest money manager.
Be sure to verify that your credit agency
is informing you of the exact details of any agreements with your creditors. A successful DMP requires you to make regular payments that could last many, many years. Ask the credit counselor to estimate how long it will take for you to complete the plan. You run the risk that they might not do what they promise. And you will be worse off than ever. You may have to agree not to use or apply for any additional loans or credit while you're enrolled in the plan. You have no guarantees that your interests are protected. Some agencies might not make the required credit card payments for you, so that they can negotiate down the amount owed and benefit themselves from this.
A Debt Management Pplan is not for most people who want to get out of credit card debt
. Your best step is to have a certified credit counselor thoroughly review your situation and offer you personalized advice on managing your dept. Even if a DMP is appropriate for you, a reputable credit counseling organization can still help you in developing money management skills and creating a budget.
Debt Negotiation Programs to Pay Off Monthly Credit Card Bills
Debt negotiation is a different way to get out of credit card debt
. When successful, it will reduce the monthly credit card bill you have to pay. Debt negotiation differs greatly from credit counseling and debt management plans. In debt negotiation, the agency will bargain down the amount you owe on your credit cards, possibly by threatening the bank with your default or bankruptcy. It can be very risky. Debt negotiation can have a long-term negative impact on your credit report and your ability to get credit in the future. Make sure that agency fees are less than the amount of debt relief they are able to negotiate. Ask an independent authority to review the agreements before you commit to anything.
Bankruptcy to Pay Off Monthly Credit Card Bills Debt
When other methods to get out of credit card debt fail
, personal bankruptcy is generally considered the debt management option of last resort. In bankruptcy, you do not have to pay off any more credit card bills. You can walk away from all charge card debt. Bankruptcy may also get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Bankruptcy also allows people to keep certain assets.
Be aware that the results
are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years. After bankruptcy, it will be difficult to obtain credit, to buy a home, to get life insurance, or sometimes to get a job. Bankruptcy usually does not erase the debt and bills you owe for child support, alimony, fines, taxes, and some student loan obligations. Still, it is a legal procedure that offers a fresh start for people who absolutely cannot pay off their monthly credit card bills, charge cards, and installment loans any other way.
After You Get Out of Credit Card Debt
However you choose to get out of credit card debt
, you must live frugally to solve your debt problems. You must change yourself, and your spending habits. Financial advice is expensive. Borrowing more money is also expensive. You are the best person to take control and manage your money.
I hope life brings you much success.
I wish you a very happy day.
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