Credit card debt help is needed by many Americans struggling with high interest credit card balances. According to a recent report from the Federal Reserve, total credit card debt in the US has reached over $1 trillion. With interest rates averaging around 17%, this debt can quickly snowball out of control without credit card debt help. However, there are many strategies and resources available to provide credit card debt help and get you back on track financially. In this comprehensive guide, we will explore 15 proven methods for getting credit card debt help.
1. Debt Snowball Method
The debt snowball method is one of the most popular credit card debt help strategies. Here’s how it works:
- List all your debts from smallest to largest balance
- Make minimum payments on all debts except the smallest
- Put as much money as possible towards paying off the smallest debt
- Once the smallest debt is paid off, roll that payment amount to the next smallest debt
This strategy helps build momentum and motivation as you start knocking out debts one by one. A debt snowball calculator can help you estimate how long it will take to become debt-free using this credit card debt help method.
2. Debt Avalanche Method
With the debt avalanche method, you prioritize paying off debts with the highest interest rates first. Here’s how it works:
- List your debts from highest to lowest interest rate
- Make minimum payments on all debts except the one with the highest interest rate
- Put as much money as possible towards the highest interest debt
- Once that debt is paid off, focus on the debt with the next highest rate
This credit card debt help method may allow you to pay off debts faster and reduce the total interest paid. Debt avalanche calculators can help determine which debts to target first.
3. Balance Transfer Cards
Balance transfer credit cards allow you to transfer debt from a high interest credit card to one with a lower promotional interest rate, often 0%. This can provide substantial credit card debt help by saving you on interest, especially if you have a large balance.
4. Debt Consolidation Loans
With a debt consolidation loan, you take out one new loan to pay off multiple higher interest debts. This combines all debts into one payment at a lower interest rate, making repayment easier. Be sure to shop around to get the best rate on a consolidation loan when seeking credit card debt help.
5. Credit Counseling
Non-profit credit counseling agencies provide expert credit card debt help guidance on managing debt through a Debt Management Plan (DMP). For a small monthly fee, they help negotiate lower rates and monthly payments with creditors.
6. Debt Settlement
Debt settlement companies negotiate directly with creditors to settle debt for less than you owe. This can sometimes eliminate debts for 30 to 50% less than the original balance, providing major credit card debt. However, it will damage your credit score.
While bankruptcy destroys your credit, it does offer the chance for a fresh financial start by discharging or restructuring debts you can’t pay. For some, this type of credit card debt help is the best option when debts are overwhelming. Be sure to discuss the pros and cons with a bankruptcy lawyer.
8. Budgeting Apps
Apps like Mint, You Need a Budget (YNAB), and EveryDollar can provide credit card debt by tracking spending, creating a budget, and finding opportunities to cut expenses. Sticking to a budget is key for freeing up money to pay down debt.
9. Side Hustles
Adding income from a side hustle provides more money to tackle debt. Rideshare driving, delivery work, freelancing, and selling crafts offer flexible ways to earn extra money for credit card debt.
10. Lower Interest Rates
Call each creditor and request a lower interest rate. If you’ve been a long time customer with good payment history, there’s a good possibility of getting a lower rate, providing credit card debt.
11. Debt Management Program (DMP)
As mentioned earlier, enrolling in a DMP through a non-profit credit counseling agency can reduce interest rates and provide a structured repayment plan. Many people benefit from this customized credit card debt.
12. Ask Creditors for Help
Contact creditors directly and explain your financial hardship. Ask if they can waive late fees, reduce your interest rate, or help modify your repayment plan. Many creditors are willing to work with responsible borrowers who need credit card debt help.
13. Debt Repayment Calculator
Online debt repayment calculators allow you to estimate payoff timeframes. This allows you to set a realistic debt freedom date when seeking credit card debt.
14. Spend Less
Cutting expenses in your budget provides the most money for credit card debt repayment. Reducing costs is key for effective credit card debt.
15. Increase Your Income
The more money you’re able to put towards debt repayment, the faster you’ll get credit card debt help. Consider strategies for earning more income to accelerate debt payoff.
The 15 strategies above provide a blueprint for getting credit card debt help to regain financial freedom. Don’t become overwhelmed. Take it one step at a time with focus and discipline. With a plan and determination, you can take control of your debt and attain the peace of mind you deserve.
References used in this article:
- Federal Reserve report on credit card debt: https://www.federalreserve.gov/releases/g19/current/default.htm
- Debt snowball method: https://www.investopedia.com/terms/d/debt-snowball.asp
- Balance transfer cards: https://www.nerdwallet.com/article/credit-cards/balance-transfer-credit-cards
- Debt consolidation loans: https://www.nerdwallet.com/article/finance/debt-consolidation-loan
- Credit counseling: https://www.nfcc.org/
- Debt settlement: https://www.consumer.ftc.gov/articles/0145-settling-credit-card-debt
- Bankruptcy: https://www.usa.gov/bankruptcy
- Budgeting apps: https://mint.intuit.com/, https://www.youneedabudget.com/, https://www.everydollar.com/
- Side hustles: https://www.nerdwallet.com/article/finance/side-hustles-ideas
- Debt repayment calculators: https://www.bankrate.com/calculators/credit-cards/debt-repayment-calculator.aspx