We know how incredibly easy it is to rack up credit card debt.
Your cards are using you, not the other way around.
it’s possible for you to do it.
Tina Russell/The Penny Hoarder
And itll be worth it.
Some of our favorite ways to make quick cash can help.
First, determine how much credit card debt you have.
you’re able to do this using a free credit monitoring service.
Then, choose your weapons!
All Smart Credit Card Users:
Debt can get out of control fast.
(Inflation, amiright?)
That doesnt mean you have to let your debt run your life.
By breaking your debt down into manageable chunks, youll experience quicker wins and stay motivated.
Two popular ways to break down debt repayments are thedebt avalancheanddebt snowballmethods.
Starting with the smallest balance allows you to experience wins faster than you would with the avalanche method.
If you followed the avalanche method, youd pay off card No.
3 first, followed by No.
If you followed the snowball method, youd pay off card No.
1 first, followed by No.
Choosing the right method comes down to deciding whether youd rather get quick results or save money on interest.
Many of these cards offer 0% interest for up to 21 months.
Higher credit scores help borrowers to qualify for a credit card with better terms.
Take Out a Loan
You might look at getting a loan to consolidate and refinance your debts.
Lets look at two options for debt consolidation here: A personal loan or a home equity loan.
Shopping for personal loans online does not affect credit scores.
In contrast, debt consolidation loans will have a predetermined repayment plan with a set schedule of payments.
The personal loan route is more attractive, however, because rates are typically lower for debt consolidation loans.
Other companies we like includeCredibleandMoneyLion.
For more of our top picks, check out our rundown on the bestdebt consolidation loans.
For homeowners, these options will most likely offer the lowest interest rates.
LendingTreecan help you find your best rate for a HELOC or home equity loan.
Compare rates in minutes and find the one that works best for your budget and situation.
Debt Settlement
The world of debt collections and creditors can be confusing, intimidating, and sometimes even illegal.
Youll be assigned a counselor who will set up a repayment and education plan for you.
This program is specifically for unsecured debt, like credit cards and medical bills.
A debt management program pays your creditors for you to ensure you stay current on your debt payments.
Your credit score may even improve during the program.
The process isnt as simple as debt consolidation.
And theres no guarantee the company will be successful.
If the company is successful, youll have to pay the settlement amount in full.
Then in April, youll owe taxes on the amount forgiven.
The settlement company will also charge you up to 25% in fees on top of the settlement.
Bankruptcy is another last resort.
The two major types for individuals are Chapter 7 and Chapter 13.
A trustee gathers and sells all of your nonexempt assets to pay off your debt.
Its a long, arduous process that doesnt guarantee to resolve your debt.
It can be reversed if your income increases, and it wrecks your credit.
Both bankruptcy options have negative long-term ramifications on your credit.
Heres a step-by-step guide to help you determine which method might be your best fit.
Step 1: Assess Your Total Debt and Financial Situation
Need Some Quick Cash?
If youre looking to boost your income this month, weve got just the thing for you.
Can You Survive 10 Days of Budgeting?
If you better wrangle your budget, it may be time to consider a savings challenge.
Most credit card companies use an average daily balance to compute interest charges.
Youll lower the average daily balance so youll pay less interest.
make a run at Get a Lower Rate
Ask your credit card companies for lower interest rates.
Its worth trying at least once for each credit card you have.
Add those savings to your debt repayment budget!
If youre in serious financial trouble, explain the situation to the card issuer.
Offer to pay a portion of the balance owed as payment in full.
For most of us, though, theres no quick answer.
Heard of These Credit Card Debt Tips?
But millions of Americans overlookthese easy tipsthat could help them manage credit card debt even more wisely.
Read moreto boost your credit knowledge and keep your credit score in check.
How Much Will Paying Off Credit Cards Raise Your Score?
Credit card usage has a huge impact on credit scores.
If you spend too much of your overall limit or miss payments, youll hurt your score.
Just because you have available credit doesnt mean you should max out your credit cards.
It is ideal to keep your credit utilization at or under 30%.
Credit utilization accounts for a whopping 30% of your score.
Credit card issuers make it easy to fall into the habit of overspending.
So if you ever want to be debt-free, you gotta change the way you use credit cards.
