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How to Clear Your Debt and Save Your Credit

 


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Hundreds of thousands of Americans are deep into credit card debt, and with fuel and food costs on the rise, it doesn't look like relief is going to help anytime soon. Tax stimulus checks that were earmarked to jump-start the economy were spent on basic necessities instead. The average amount of credit card debt is over ten thousand dollars, and if cardholders only pay the minimum, it's going to take years and years to pay it all off!

What's the solution? There is more than one way to clear credit card debt. A consumer can utilize the services of a debt consolidation company and make one simple payment. This is one of the easiest ways to clear debt and begin rebuilding credit. It takes the hassle out of the card holder's hand and puts the responsibility on the debt consolidation company.

For cardholders who want to eliminate the debt themselves, there is another simple solution. It may be painful, but you have to get real. First, sit down with all of your credit card statements and a notebook. Write down the card name, the minimum monthly due, the date it should be paid, and the total balance.

Organize the credit cards staring with the lowest amount first. Pay the minimum amounts on all of the rest, but with the lowest balance credit card, make an additional payment. The additional payment should be as much as you can include, anywhere from twenty to one hundred dollars. Keep paying the extra amount on the lowest balance until it is completely paid off.

Next, apply the amount you were paying toward the lowest balance credit card, plus any extra you can to the next lowest balance card. If you were paying a $50 minimum on the first card, plus $25 extra, you can now apply that $75 dollars to the next card, plus the $50 minimum. When that card reaches zero, move to the third on your list. Now your payment will be $75 $50 $50 = $175.

Do you see how this can quickly clear all of the debt off the cards. There is an added benefit of getting help from credit card companies. Once you make six payments or more on all of your cards, and the balance is shrinking, some card companies will contact you with low interest balance transfer offers.

If you can save money, and discipline yourself to make the combined total payment from all the cards to the one credit card you would transfer the balance to, then by all means, transfer away. This will increase your available credit line, which combined with a steady payment history can increase your FICO score.

It takes steady work and discipline but a cardholder can clear credit card debt and rebuild their credit rating in a very short period of time by repaying the money they borrowed.

Nicholas writes on how to get out of debt , using such strategies as debt consolidation or an IVA in the UK

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