Wednesday, April 15, 2009

Credit Card Debt - How do I come out of it ?

Credit Card Debt - How do I come out of it ?
Majority of American population is addicted to the plastic money and the addiction has turned them to victims of the credit card debt. It is one thing to use the credit card and enjoy the frills and the instant gratification which comes along with it, but it is tiresome to pay the price for it later. To get out of credit card debt and still use the credit card wisely is more of a mental thing.

You just need to change your attitude and develop some amount of self control.

1) Use your available credit line carefully and make your payments on time. Your payment history makes a lot of difference; you stand to improve your credit score dramatically if you do not miss a payment.

2) The first thing to get out of the credit card debt is to be punctual and consistent with your payments.

3 ) Try and pay more than the amount of minimum due. The credit card companies use smart business tactics when they ask you to pay only a small percent, the minimum due of the amounts owed by you. When you pay just the minimum amount due, the credit runs for a longer period, which means more finance charges, late fees and more revenue for the credit card companies.

4) You can also get out of credit card debts by taking alternative measures to make your credit card payments on time. There are alternatives like auto pay direct debits, online payments or payment over the phone. There is a possibility of a fee for a payment over the phone but it is worthwhile because it will not show as a late payment in your account and ruin your report unnecessarily.

5) Conscious efforts on the part of the credit card holder to make the payments on time and consistently, is seen as an improvement. This surely will save you from succumbing to a default rate or being delinquent.

6) Review your credit reports and rectify any errors you come across. One single incident of identity theft or discrepancy in your credit report could ruin your credit history. So in order to boost your credit score, take conscious steps to monitor your credit report as frequently as possible. You could also enroll with a credit monitoring service which automatically monitors your credit file every business day and alerts you of any changes not initiated by you.

7) Close any accounts that you do not need or use. The benefit is that this lowers your amount of available credit and can help maintain your credit score in the bargain. Don’t let anyone make any inquiry on your credit report unless there is a total need for doing so. Increasing number of inquires on your credit report has an inherent tendency to spoil your credit ratings because they imply that you are in dire need of credit. Your intention should be to carry only one or two credit cards with balances paid in full.

8) The notable thing is to get credit or ask for a credit line increase only when you need it. It is a different thing when you are trying to set up your first credit.

9) Consolidating your accounts to reduce your payments is another alternative which could work to your advantage. Unless you have maxed out your credit line, you could combine your debt from other credit cards, onto one of your credit cards with the low interest rate and pay it off.

10) You could call the credit card company and ask them to help you with the transfer of funds.
When you have to pay off your credit cards, start off by paying from the one which has the lowest rate first, and then proceed to the next one with a slightly higher rate. You could call up the credit card company and tell them the rate of interest rate is high, and that you would like to negotiate for a lower interest rate. If you have been a faithful customer, the credit card company would give you better options or even offer you a credit card with a lower interest rate. But then, you will have to call up the credit card company and ask them to lower the interest rate. They would want to retain you as their customer and would not like if you switch to another competitor and they would do everything in their capacity to keep you happy.

Use your credit card wisely and Debt should be out of the window for your hassel free future.

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