Legally Eliminate Credit Card Debt |
By Stewart Pelto on August 12, 2010
.jpg.aspx) Listen: it took time to grow your credit card debt and it’ll take time to eliminate it, too. There is no silver bullet that will whisk your problems away, but you can get aggressive with smarter budgeting techniques and serious lifestyle changes to restore your financial health.
First, get in touch with your creditors. Tell them you are working to pay your debts and mention you’ve spoken with a debt expert about proper budgeting techniques. They may help you along with temporary relief from interest or even agree to settle your debt for a lesser amount. Consider that last carefully, though; it’s a good option for some but leaves a stain on your credit report.
Second, choose your plan of attack. Consider filing for bankruptcy only if you’re in serious debt and can’t think of any way out. It is indeed a legal way to eliminate credit card debt – but it’s tricky, it involves a lot of paperwork, and it’s basically a battering-ram punch to your credit rating’s solar plexus that leaves a ten-year bruise.
You can also transfer balances on high interest credit cards to promotional low interest cards. It’ll relieve some of the pressure and will reduce the total amount you need to pay back. But be careful: no amount of moving your debt from “here” to “there” is going to make the boo-boo all better if you don’t tighten your belt, grab your bootstraps, and start paying off debt with aggressive conviction.
So how do you get enough cash to pay down those debts with aggressive conviction? That’ll be step 3: draw up a solid budget that squeezes the most value out of your income. With hard work, patience, and time, your credit accounts will be cleaned up and looking nice!
One more word of advice: fight the urge to close your accounts once they reach a $0 balance; snip them to bits if you please (you can even watch a number of YouTube videos showing scissor-induced credit card brutality), but keeping the account open (even if inactive) will improve your credit rating by reflecting favorably on your credit-to-debt ratio.
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