If you zero out your credit card debt through legal means, this results in more funds for your monthly budget. If you're planning to buy a car or a home or make other large purchases, you could enjoy a higher credit score and better chances of approval. To start getting your credit cards under control, lower your interest rates. Make sure that you organize your payments strategically, like a coach would draw a play to get the first down. If you aren't exactly Bill Belichick when strategizing how to pay your balances off, you can always consult a debt management agency.
Get Your Interest Rates Down First
It can be very difficult to pay off larger credit card bills if your interest rates are on the high side. But by lowering your interest rates, you can increase your payment on those cards' balances without increasing your overall payment.
There are two tried and tested ways to lower interest that are more popular than others - consolidating with a loan and opening a new card. It doesn't cost a thing to transfer balance from one card to a new one with an introductory rate. Consolidating bills with a home equity or personal loan provide long term low rates with some closing costs involved.
How To Set Up A Pay Plan
The next step after reducing your interest rates is to set up a payment arrangement. One course is to make extra payments on the lowest balance. You can then move on to the next lowest balance and pay it off with the extra funds.
Or, on the opposite end, you can set aside those extra payments and make them against the highest interest account. You could save a lot of money from your total interest by using this scheme.
Hiring A Debt Management Company
Debt management companies can be of assistance when the next logical option for most is to file for bankruptcy. For a small fee, they will pay your bills, lower your rates, and structure a debt elimination plan. It may lead you to a lower credit score, but at least it wouldn't be as bad as a foreclosure or bankruptcy.
Before you commit to a payment arrangement, make sure you've considered all your options. The greatest savings are often found with the do-it-yourself approach of debt consolidation and budgeting. But if push comes to shove, don't file for bankruptcy yet - you should first see a debt management company and hear what they have to say.
Get Your Interest Rates Down First
It can be very difficult to pay off larger credit card bills if your interest rates are on the high side. But by lowering your interest rates, you can increase your payment on those cards' balances without increasing your overall payment.
There are two tried and tested ways to lower interest that are more popular than others - consolidating with a loan and opening a new card. It doesn't cost a thing to transfer balance from one card to a new one with an introductory rate. Consolidating bills with a home equity or personal loan provide long term low rates with some closing costs involved.
How To Set Up A Pay Plan
The next step after reducing your interest rates is to set up a payment arrangement. One course is to make extra payments on the lowest balance. You can then move on to the next lowest balance and pay it off with the extra funds.
Or, on the opposite end, you can set aside those extra payments and make them against the highest interest account. You could save a lot of money from your total interest by using this scheme.
Hiring A Debt Management Company
Debt management companies can be of assistance when the next logical option for most is to file for bankruptcy. For a small fee, they will pay your bills, lower your rates, and structure a debt elimination plan. It may lead you to a lower credit score, but at least it wouldn't be as bad as a foreclosure or bankruptcy.
Before you commit to a payment arrangement, make sure you've considered all your options. The greatest savings are often found with the do-it-yourself approach of debt consolidation and budgeting. But if push comes to shove, don't file for bankruptcy yet - you should first see a debt management company and hear what they have to say.
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