Credit card debt is unavoidable for the average American since most people rely on credit cards to pay for anything and everything. Getting stuck with the debt, however, is avoidable. A typical American household has a credit card debt balance of a little over $16,000 – an amount many people struggle to pay off because of the increase in cost of living.
Fortunately, it's not completely impossible to clear your credit card debt. You only need to know what to do to effectively ease the pressure on your finances and become debt-free given enough time.
1. Start by Stopping
The first thing you need to do when trying to clear a massive credit card balance is keep it from getting even bigger while you're sorting things out. Sure, relying more on cash can be quite the hassle, but every time you swipe your credit card, you're moving one step away from being debt-free.
What do you do until then? Stick to cash as your main form of payment as much as you can. If you think the only way you can get something is to pay for it with your card, ask yourself if that purchase is absolutely important or if it can wait until you clear your current debt.
2. Sort Out Your Statements
Sort your statements according to amount and interest rates. It's much easier to clear the debt if you prioritize clearing balances that have the highest interest rates. Any time you're not actively paying off your debt is time letting interest rates increase your balance.
Sorting out your credit card statements also gives you the chance to prepare your budget for the big credit clearance. Many people make the mistake of putting too much of their current money to clearing the debt, only to realize that they left very little cash on hand for their needs and they end up using their credit card.
3. Consider Debt Settlement
Let's face it, not everybody can be a financial wizard. If that was the case, clearing credit card debt wouldn't be such a struggle for many people. If you're at a loss at how to manage your existing debt, you should consider getting help from a debt settlement agency, which specializes in finding better options for paying back your debts at a fraction of the price.
As with anything that involves a lot of cash, you have to make sure that you're seeking help from a reputable agency. You should also look for accreditation that ensures you are working with experts and their credibility in the industry. The next step is to check customer feedback to get an idea of how good they are at their job and compare them with other agencies in or near your location.
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