Countless American households are staggering under virtually unmanageable amounts of credit card debt. In spite of their best intentions, consumers have fallen behind and are now facing the consequences of compounding credit card interest that makes it virtually impossible to pay down the debts in the foreseeable future. It is interesting to note that all socioeconomic classes are affected by this debt epidemic, and there is virtually no segment of society that is exempt from oppressive credit card debt.
There is a fast track to getting out of credit card debt that has finally been revealed and that is getting more and more play. It begins by categorically stopping the credit card charging madness. In other words, consumers must resolve to no longer add any debt to their current undertedness. Using a debit card tied to a checking account or simply cash is the best way of paying for little and impulse purchases, since it is the little purchases that add up to become big debt burdens over time. Some consumers have gone so far as to take their credit cards and freezing them into a block of ice, and keeping them in the freezer for emergencies only.
Next, it is crucial to pay more than simply the minimum amount due. The minimum amount due is usually barely enough to cover the interest rate, while leaving the principal of the outstanding credit card debt untouched. As a result, the consumer may be paying faithfully for years, only to hardly ever see the balance due budge at all. The snowball method, a repayment method championed by consumer advocates, suggests that consumers should pick one credit – preferably the one with the lowest balance – and make extra payments. Then, when it is paid off, all the money that was paid to this card on a monthly basis should be added to the minimum payment due on another card, and so on.
Getting out of debt also requires the diligent examination of spending habits. A budget that details all expenses – loan payments, utility payments, and estimated payments for variables such as food and gasoline – empowers consumers to eliminate spending that is not necessary or even redundant. What is more, since it gives a concise figure of monthly expenses, it presents a base amount from which monthly income can be subtracted to reveal the amount of disposable income. If the income is less than the expenses, serious soul searching and expenditure slashing is needed. This may be done by avoiding the impulse purchase, shopping with a list, and saving up for major purchases.
In addition, consumers need to be aware of the interest rates their credit card issuers are charging. High interest cards should be paid off quickly to maximize long term savings. Finally, contacting a debt settlement agency most certainly has the potential for fast tracking the repayment of credit card debt. Debt settlement negotiators will work with debtors and creditors to lower interest rates, outstanding balances, and empower the consumer to repay the outstanding amounts due in three to five years. Reputable companies are listed on the Better Business Bureau website.