Reduce Credit Card Payments
Reduce credit card payments by asking for a lower interest rate from the lender or by paying cash for future purchases. Only charge what can be paid in full each month. Cut expenses for a while and double up on payments to get the balance down quicker. Reduce credit card payments by transferring balances from high interest accounts to low interest accounts. Save the money for big purchases and pay cash instead of charging them. Correcting any negative derogatory items can raise one's credit score which will have an effect on future credit and will help to convince the current lender to lower the interest rate. "Then the lord of that servant was moved with compassion, and loosed him, and forgave him the debt" (Matthew 18:27).
Making payments more often can help to reduce credit card payments. Making one every payday will mean making at least two per month as most people usually get paid at least twice per month. This can help to pay down the principle balance and lower the payments even in a short period of time. Maybe multiple payments each month can help the debtor to avoid some of the interest charges as well. The best way for this to work is to have both payments each month to add up to more than the minimum monthly payment billed by the creditor.
Having an excellent payment record with a creditor will work in the debtors favor when trying to negotiate for a lower interest rate. Another thing that can work in a debtor's favor with negotiations is not keeping the account maxed out or over the charge line. To reduce credit card payments a person needs to have several strategies and both a short-term and a long-term plan. If the interest can not be reduced in the short-term then waiting six months and trying again can help if all debts are made on time and one's credit score goes up. Having a higher credit score will mean a greater possibility of being approved for a more desirable charge account with lower interest and no fees.
Apply for a charge account with banks that offer no interest or low interest for six months up to one year and transfer balances from high interest accounts. Look for no annual fees and unlimited balance transfers. Having no interest or low interest accounts will help to reduce credit card payments at least until the interest starts accruing on the balance. After transferring balances it would be a good idea to double up on payments to get the balance down as much as possible before interest starts accruing. Be careful not to use the new account for charging new purchases or it will be possible to end up in the same situation as before.
Every person is entitled to one free copy of her credit report every year from each of the three credit bureaus. An individual who wants to reduce credit card payments should consider obtaining a copy of her report and checking over it very carefully. Disputing errors can lead to a higher credit score which in the long run will help to reduce payments because of the possibility of acquiring accounts with lower interest and fees. Each bureau has dispute forms that can be used for anything questionable or that is incorrect on one's financial history report. The bureau has 30 days to satisfy the complaint by either removing the item or sending a letter that the item will stay on the report. The way this is handled will depend upon the creditor that owns the account and what they answer back to the dispute. If they can show that the item is correct then it will stay on the report. If they fail to answer at all then the item may be removed.
Another way to work towards lowering debts is to become organized, evaluate spending habits, and making up a budget that can easily be followed. This type of plan can help to reduce credit card payments because it helps the consumer to stop charging and spending unnecessarily. No new charges will eventually lead to lower overall debt. The ideal situation is to have no debt except for large purchases that are needed such as a home and an automobile. This will maximize the money situation so that any other purchases can be made with cash. Some purchases that a person might want to save for include furniture or other household items. Expenses for cheaper items could be worked into the budget as needed.
Being deep in debt can certainly put a great deal of stress on a person. In addition, being in debt can affect the entire family or household. After being deep in debt most people are sorry they ever applied for charge accounts and wish that they had been more disciplined. While it is too late to undo what has been done there is a way to stop repeating the same mistakes over and over. Reduce credit card payments by having a plan and sticking with it. Do not get sidetracked by impulse purchases and spending too much money on unnecessary items. Make a commitment to slowly get out of debt and to stay that way. Financial problems can lead to illness caused by stress and can even lead to divorce. Having things is certainly not worth losing a spouse over or hurting one's family over. Become determined, pray about the situation, and do what is good and responsible.
Settle Credit Card DebtOptions to settle credit card debt include credit counseling, taking out a consolidation loan, negotiating a settlement with creditors, and bankruptcy. Homeowners may have another option by taking out a second mortgage and using the money to pay off debts. A mortgage loan will have lower interest compared to high interest charge accounts. A person who is looking for ways to settle credit card debt should think about the pros and cons of each option and then make an informed decision. Some people may be in a situation where they just do not have enough money to pay more than the minimum payment on charge accounts. Living on a budget and paying extra on one account at a time might be an answer. "In thee, O LORD, do I put my trust: let me never be put to confusion" (Psalm 71:1).
Credit counseling is a good way to start when seeking an answer to high interest accounts. A counselor can give an individual some advice on how to track spending and how to gradually pay down or settle credit card debt. Many consumer counseling services are nonprofit and do not charge a lot for their services. Other than advice counseling services can help a person to make sure that her bills get paid on time each month and will even try to negotiate interest rates and stop harassment by collection agencies. The agency usually receives one lump sum payment from the debtor and then distributes that money between creditors. Beware of any agencies that want a large sum of money upfront for their services and have a monthly membership fee on top of that.
A consolidation loan to pay off charge accounts makes sense if the interest is lower on the consolidation loan compared to the interest on the charge accounts. A person who owns a home might want to consider a home equity loan or a line of credit to settle credit card debt. Doing this could put the borrower at risk to lose her home so before actually going through with this deal the risks should be considered very carefully. Having one monthly payment instead of ten does make life a little easier but the debtor needs to be certain that the charge accounts are paid off with the money from the consolidation loan or there will probably be a lot more financial trouble ahead.
Negotiating a settlement with creditors is something that can seem very attractive to those who are anxious to settle credit card debt. Companies that advertise this type of service claim to be able to offer a payoff settlement to creditors that are much less than what the debtor actually owes. They also claim to be able to get the creditors to lower the interest and to stop charging late fees and over the credit line fees. The debtor needs to be cautious on choosing the right company for negotiating with creditors. Making sure they are a legitimate and reputable company is very important. A person should be very concerned about companies that want a large sum of money upfront before they will start negotiations. Before hiring someone to do this for you a person should contact her creditors and find out if they will negotiate the payoff amount and accept payments instead of one lump sum amount. Start negotiations by offering 40% of the amount due and go up to as much as 60% if necessary to get a creditor to accept the offer.
Filing bankruptcy is an option that will help to settle credit card debt. Filing Chapter 7 is possible if the debtor has not filed in at least eight years and if she has taken a consumer credit counseling class and received a certificate for doing so. The downsides to filing bankruptcy are the costs and the detriment to one's credit history. The costs will include attorney's fees and court costs. The bankruptcy will stay on the debtor's financial history for ten years after the discharge date. If the person filing bankruptcy has mostly credit card debt then Chapter 7 is the best way to go but if she has property that she wants to keep then Chapter 13 should be considered instead.
A person with good judgment will want to try anything before she gives up and files bankruptcy. A good place to start is by keeping a budget and having a payment plan to pay off high interest accounts. Living on a budget could help to settle credit card debt as the debtor becomes more aware of spending habits and can apply more money to paying off debts. A budget is easily set up by listing all income, all assets, and all expenses. This can be done by month or by payday. Every penny spent should be written down. Knowing where the money goes makes it much easier to track spending. Spending less will mean more available funds to get debts paid off.
When debts add up to more than one's income then something has got to give. Either the debtor must find a way to make more money or she must find a way to spend less or owe less. Talking to a financial counselor might help a person see where she can reasonably settle credit card debt. Having a professional look over the budget might help in seeing where changes are possible. There is an answer but it may take time and determination to find the answer and begin to see the results.
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