Print Article for : Getting Out Of Credit Card Debt

Your Online Guide » Credit Cards » Types of Credit Cards

[G222]Getting Out Of Credit Card Debt

by Christopher Thomas, Chr

You can get out of credit card debt, if you are determined enough. Though it's difficult to get out of debt, it isn't impossible. All you need in order to get out of credit card debt is planning and determination. Both are equally important.

Determination doesn't come without proper motivation, so you need to ask yourself these questions: "How will getting out of credit card debt benefit me", "What difference will it make", and "Is it really worth it to try to get out of debt." Use the answers to these questions to build up your determination.

The fact that all the nagging mail and phone calls from the collection agencies will end should strengthen your determination and provide you with a reason to get out of debt. Think about the stress-free life you'll have after you get out of debt. List the reasons you want to get out from under your credit card debt and ponder the benefits. Collectively, these will help bolster your determination and prevent lapses.

The second thing that you need to get out of credit card debt is plenty of planning. The planning starts with making a list of the credit cards that you currently posses and noting the debt and the APR for each of them. The sum total of all this information is how much you owe. You also need to check whether you have been defaulting on payments on any of these credit cards (and hence incurring late fees). You will need to avoid doing that. Put it in the plan you have prepared for getting out of debt.

The next step is to check your current financial position. Make an assessment of what you expect your future financial position to be. Then you need to do research to check what balance transfer offers are available. See if one of these can prove beneficial to you. Use this information to calculate how much time you will require to get out of debt and how you will distribute the debt payment across your various credit cards. Try to pay off the debt that is largest first and make sure that you don't make any late payments.

You can get out of debt. It is not impossible. If you have any more questions about getting out of debt, contact a consumer credit counselor.

If you have multiple credit cards and a lot of debt, debt stacking is the best method to maximize your payments to the credit cards. I was once in $12,000 worth of unsecured debt, and used this method to pay the balance off in less than 2 years. Simply put, the system uses the principle of attacking the highest interest rate credit card first, while only making minimum payments to the other cards. Let's look at an example:

* CC 1: $5,000 at 12% APR, minimum payment $100
* CC 2: $5,000 at 18% APR, minimum payment $100
* You are able to pay $300/month towards all credit cards

Spreading the Payments evenly ($150/month to each card):

By spreading the payments evenly, CC 1 would be paid off in approximately 3 years and 5 months. CC 2 would not yet be paid off. After paying off Credit Card 1, if you applied the $150 left over to CC 2 (thereby increasing the monthly payment to $300) you would finish paying off CC 2 about 7 months later. This makes a grand total of 4 years to pay off both cards.

Using the Debt Stacking Method:

With the debt stacking method, you would apply the maximum amount possible to the highest interest rate card. Therefore, you would pay $200/month to CC 2, while only making the minimum payment of $100/month to CC 1. It would take approximately 2 years and 8 months to pay off CC 2. If you applied the left over $200/month to CC 1 (thereby increasing the monthly payment to $300) it would take and additional 12 months to finish paying off CC 1. This is a grand total of 3 years and 8 months to finish paying off both cards.

This is the power of compound interest. Using the debt stacking method instead of spreading the payments evenly, you would have paid off these credit cards 4 months earlier. And based on making $300/month payments, you would have saved $1,200 with the same total monthly payment!!!

So if you find yourself in a situation with multiple credit cards and varying interest rates, think of the total payment you can make towards credit card debt every month, and then make minimum payments on all the credit cards with lower interest rates, while paying the maximum amount possible to the highest interest rate card. You'll be debt free much faster, and you will save a lot of money!

Article Source : How To Make Cards Appear

About Author

Both Christopher Thomas & Jeffry Evans are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Christopher Thomas has sinced written about articles on various topics from Debt Reduction Consolidation, Family Concerns and Credit Cards. Christopher Thomas enjoys writing for several web sites, on and themes.. Christopher Thomas's top article generates over 1900 views. to your Favourites.

Jeffry Evans has sinced written about articles on various topics from Wedding Photography, Recreation and Sports and Investments. Get more great finance and investing tips at my .. Jeffry Evans's top article generates over 18100 views. to your Favourites.