5 Ways To Eliminate Credit Card Debt

[Dec 25, 2009.]

 

A New Year's Resolution

Many people will decide to get out of debt in the new year. None of them will be successful without a good plan and some self discipline. If you really understood how much the items you buy on credit cost with the interest you pay over time, chances are you wouldn't put a meal or an impulse buy on credit. It is just too horrible to realize that something sitting in your closet or garage costs double what you paid if you carry a balance on your credit card for a long period of time. Take into consideration the following 5 steps as a way to become debt free in 2010.

5 Steps To Eliminate Credit Card Debt

1. Take out a personal loan and design your own debt consolidation program. Interest rates on personal loans are normally much lower than the 10-30% you may be paying on your credit cards. A lower, fixed rate loan with a fixed term and amortized payments will be a fast way to get out of debt.
2. Use your home equity loan to eliminate credit card debt. Interest rates on home equity loans are normally based on Prime Rate which is currently 3.25%. Even if you have a 2% margin, the fully indexed rate would only be 5.25%, much lower than a credit card.
3. Consider selling personal property. If you can't get a personal loan, or if you don't have equity in a home, maybe you own a valuable piece of personal property. Do you have an extra car, an expensive camera, a boat, an RV, or anything of value? Chances are if you have credit card debt you may have purchased something that you are tired of already and maybe can sell to pay off credit card debt.
4. Make a list of your credit cards in order of interest rate. Make the minimum payment on all the cards except the one with the highest interest rate. Take a look at your budget and see where you might be able to squeeze a few extra bucks. Rent fewer videos. Drive a little less. Find money somewhere so that you can pay the most on the card with the highest rate each month. Continue to do this until the first card is paid in full. Then start on the next highest card, and so on.
5. Contact a professional debt relief specialist and see about the types of debt consolidation programs that might be available.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.