Conquer Credit Card Debt On Auto-Pilot

Finance & Money Blog

Did you make a financial New Year's resolution this year?  More than 1/3 of us will do so.  But the big question quickly becomes how to keep it?  Good news!  If your resolution involved ridding your life of pesky credit card debt, you can succeed with less effort than you may realize.  Here's how you too can beat the plastic without centering your life around it.

Negotiate Lower Interest Rates

Contrary to what many people think, credit card companies would really prefer to be paid back rather than have to try to collect.  If you're having trouble making payments, call the credit card companies and explain the situation.  They may be willing to offer lower interest rates for a certain period of time.  Lower rates will automatically make it easier for you to pay back debt faster.  And while negotiating with creditors may require you to agree to close your account, don't be afraid to do so.  You're trying to get rid of debt, after all. 

Consolidate Debt

Because it's revolving debt, credit card debt often adds back up just as quickly as it is paid off.  This leads to an endless cycle of large payments that get you nowhere.  To stop the cycle, it may be best to consolidate some or all revolving debt into a single installment loan debt.  There are several good reasons to do this.

First, it reduces the quantity of minimum payments, freeing up money in the budget and decreasing the chances of missing a payment.  Second, it sets a regular schedule to adhere to and a target date to be debt free.  Third, installment debt generally can't be used to charge against, resulting in making actual headway against the debt total. 

Destroy Cards and Use Cash

The key to consolidation of debt is to prevent yourself from reusing open credit lines and getting back into trouble with cards.  To avoid this, it's best to destroy physical cards and possibly to close open accounts.  While this may seem difficult if you've been relying on credit cards as part of your budget, it's actually very freeing.  Rather than try to juggle credit and debit cards throughout the month, use a fixed amount of cash instead.  Not only do consumers generally spend less when using cash, it's easy to manage and budget for future needs. 

Use Automatic Payments

Once you've consolidated your debt to an installment loan or negotiated better rates, set up automatic monthly payments.  You may even qualify for a lower interest rate for choosing auto-pay options.  If possible, time those payments to be sent soon after payday to ensure that the loan is always paid without incident and that you know what's left to use for the month's expenses.  Then, you can really set it and forget it!

Choosing to make this year your year to become debt free is a big step.  And while it will continue to take some effort on your part, it doesn't have to be as painful and time-consuming as many fear.  You can do this, and you can do it without sacrificing your time, energy, and interests. To learn more, contact a company like Las Vegas Finance for help. 


13 January 2015

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