Top 10 Ways to Settle Your Debt Card Payment

February 5, 2014 by  
Filed under Business

A number of options are available for the borrowers, who are struggling to get rid of their credit card debt. This might seem to be a daunting task, but if you want to avoid bankruptcy, you need to pay the amount within a stipulated period of time. A credit card company may accept your terms of settlement and often you can land up in paying less than the actual amount. Adopting few steps can make the process easy for you.

Pay More Than The Minimum Amount
Credit card companies always appreciate when their clients pay the minimum amount which mostly includes the rate of interest and a little amount of the actual debt. But, it is always advisable to pay more than that. You can compare the monthly bills and can figure out the monthly interest and then can chalk out the amount you can pay.

Pay The Debt With High Interest First
If you have multiple debts with different rate of interest, then start with the one that has the highest rate of interest. Though the ones with low rate of interest will accrue interest, but is easy to get rid of those easily. Paying of debt with the highest rate of interest makes the process easy.

Negotiate With The Credit Card Companies
You can even negotiate with your credit card company and outline a way to be out of the financial distress. Some of these companies even reduce the rate of interest and waive the late fee on the debt amount. Few of them also agree on favorable terms to their loyal customers.Top 10 Ways to Settle Your Debt Card PaymentDo Not Close The Account With The Current Balance
Though it seems to be a one-stop solution, but it has some disastrous consequences. This will affect your credit score and also your credit history. Your credit utilization that is your permissible limit against your present debt will go down.

Transfer Your Debts
You can even transfer your debt from a credit card with a high rate of interest to that with a low one. Few nominal or no rate of interest opportunities is available you can avail those. While availing these, it is advisable to keep in mind the transfer fees, the time period in which this rate of interest will be applicable, and how long the balance needs to be kept with the company.

Seek The Help Of Counseling Services
Accredited credit counseling services can be a good option. The counselors can negotiate with the respective credit card company and outline a debt management plan that can help you to get rid of your debt. They provide these services for free.

Have An Emergency Fund
It is important to have an emergency fund that can address your financial crisis. Extracting money out of your savings account to pay off your debt may add up to your difficulties in the future. So, financial advisors propose to have at least a month’s salary in hand to address the crisis.

Formulate A Budget
It is important to chalk out a budget for a month and track the expenses accordingly. This helps to curb overspending and also helps you to explore avenues to save money.

Use Tax Refunds Judiciously
A tax refund seems to be rewarding when debt surmounts considerably. You need to spend it wisely. It is advisable to remove the chunk aside and add it to your savings.

Liquidating Your Asset
Although this seems to be disheartening, but if you are in a dire need of money to settle your credit card debt, you can even liquidate any of your assets. At times, liquidation of assets eases of financial hardship in the future.

You can freeze all your existing credit cards, but that can be your last resort, when nothing is working. By strategic planning and following few steps, you can evade the situation of financial difficulty completely.

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