Resolving Your Credit Card Debt

03
August

Your credit score is very influential in your ability to receive a lot of life’s perks, so it is essential to resolve any credit card debt you may have piled up. Resolving credit debt is no easy chore. Once you’re in debt, you will have to pay off the money you borrowed, interest, and any late fees you racked up in the process. If you want to improve your credit score and get out of debt, there are a few things to remember.

First, don’t make the situation worse. If you have a lot of debt, do everything you can to pay it off now as opposed to postponing it. By making only minimum payments, the amount you owe will increase substantially as interest takes effect. Whenever you have the money to make a large payment on your credit cards, do it.

The last thing you want to do is miss a payment. Do everything possible to make payments on time so you don’t incur late fees and add to your debt. Set up payment reminders to alert you to make monthly payments. It is one thing to miss a payment because you don’t have money, but another if you simply forget.

Next, consider talking with your creditors about ways you can reduce your debt or interest rates. Creditors want you to pay off your debt, so they might cut into it or provide your with a payment plan that works for you. If you are struggling and can acquire reduced minimum payments, you will be less likely to miss a payment. Fewer missed payments equals fewer fees, and less total debt.

Another way to get out of credit card debt is to consolidate your loans. Debt consolidation is the act of transferring a bunch of credit cards to a single account. This can make interest rates lower, and it can also make payments easier. Debt consolidation companies can work with your creditors for you to make your payments as easy as possible.

One myth about credit is that checking your credit score actually hurts it. This isn’t the case at all, so feel free to check your credit score through a reputable credit company. Obtaining a copy of your credit report can actually help you formulate a plan to get out of debt. Plus, sometimes credit companies make mistakes or forget to take things off your credit report. If you recognize an error on your credit report, you can alert the credit card companies and immediately improve your score.

When you begin to pay off your debt, make a sound financial plan. Choose the accounts that are currently charging the highest interest rates to pay off first. These are often the oldest cards that are beginning to charge the largest rates because you have left your debt unsettled for so long. Of course, if a payment on a specific account will soon be past due, focus on paying off that card so you don’t experience unnecessary fees.

Once you start making payments, your credit score will improve. Recent credit card payments are more important to your score than older ones, so your score can improve even if you don’t significantly cut into your debt. The most important thing is that you are consistent in your payments and put as much money toward your debt as you possibly can.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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