As a nation we are almost totally dependent on our credit Cards. The cards are very easy to use, from buying plane tickets to a pack of gum. This isn't always a bad thing. Credit cards are very convenient and are safer to use than cash. Then, if you are not diligent your spending can get out of control. You start buying more things than usual and you have a hard time making the full payment each month. Then, with penalties, fees, high rates, and continued spending debt accumulates much to fast. This scene is repeated all over the U.S. and it can even happen to you. So if you are in debt by a little or a lot you may want to consider some of the steps below.
1. Know you Debt position.
Debt is a scary thing and you can very easily let it get out of control, it's easy to start ignoring your bills and let them pile up. You need to really sit down open up all the bills and find out the total amount you owe so you can start the process to becoming debt free. It is a great idea to then list your cards in order of highest rate to lowest.
2. Pay off your Highest cards first
The cards with the highest rates are charging you the most, so paying these off first will make it easier later to pay off the lower rate cards.
3. Call you Credit Card Companies to get a better rate.
Find on your bill or on the their website there toll free number for customer service. Then ask them to lower you high rate credit cards. I would suggest telling them you are getting better offers from other companies and you want them to lower your rate or you will move on to another company. A lot of the times the reps are authorized to lower your rate and not lose you as a customer. If you get your rates lowered this will be very helpful in your quest to be debt free.
4. Try to get a new card.
Are you getting new card deals in the mail saying you can get a 0% interest rate if you transfer to them. It could be a great idea to help lower your monthly payments, but you want to make sure you read the fine print and find out how long the 0% will last. You don't want to be stuck with a higher interest rate card than you had a few moths before. That would defeat the whole purpose.
5. Avoid fees and penalties
Avoid late payments by all means necessary. If you make a late payment the credit card company can increase your interest rate to 25% or more. If you have a hard time keeping track of your due dates, you should set up an automatic payment from your checking account to your credit card each month. If you don't pay all you cards on time they can still raise you rate if they see you've made a late payment on another card. Make sure you don't go over your credit limit as these fees can really add up. You can also get hit with a $35 fee or more.
6. Get your credit score up
If you have trouble getting a no- or low-interest card, it's is most likely that your credit score is too low. This is the number you get based on how you manage your debt. So, if you have a lot of late payments or your cards are to their maximum limits your credit score will be low. If you make all your payments on time over the next six months to a year and pay down a lot of your biggest balances first, you should be able to improve your credit score by as much as 40 -60 points.
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