Are you so deep in debt you can’t see any way out? If so, the culprit is probably credit card debt. There may be plenty of reasons why you got over your head in debt. You might have lost your job, become underemployed, had an accident or suffered a medical emergency. Or maybe you were just having too much fun using those credit cards.
It doesn’t really matter why you ran up so much debt. The important thing is you cannot hope for a better life until you do something about it. In fact, most experts say that the first step to achieving happiness and financial freedom is to get rid of those debts so you can start saving and investing in your future.
The right and wrong ways to jettison credit card debt
If you’ve searched Google or one of the other Internet search engines on the phrase “credit card debt,” you’ve already seen that there are more than 30 pages of search results. These typically range from advise about getting out of credit card debt to websites offering to help you consolidate those debts. Unfortunately, almost all of these are the wrong ways get out of credit card debt. Why is this? Let’s take a look at some of the alternatives.
Paying off credit card debt
There are a number of ways to pay off credit card debt. For example, some experts will tell you to pay off the credit card with highest interest rate first while others say you should pay off the credit card with the smallest balance first so that you can feel you’ve accomplished something. One financial advisor suggests that you divide the credit card minimum payments in half and pay that amount twice a month. Or you could make what are called “snowflake payments” where you immediately send any extra money you get from eBay, a garage sale or a bonus directly to one of the credit card companies to help pay down your balance.
Consolidating credit card debt
You’ll also find a lot of listings related to consolidating those debts. Some of these suggest that you take out a debt consolidation loan and pay off all your credit card debt simultaneously so you’ll have only one payment to make a month. Others recommend what’s called a debt management plan, which is usually developed in conjunction with a consumer credit counseling agency. The way this works is similar to a debt consolidation loan in that you’ll have to make only one payment a month, except in this case instead of making that payment to a bank or credit union, you make it to the credit counseling agency.
Why all these are the wrong ways
There is one simple reason why all these are the wrong ways to pay off credit card debt. It’s because not one of them can actually reduce your debt. No matter which one of these solutions you choose, you’ll still have the same amount of debt to jettison. If you owe $25,000 you’ll still owe $25,000 regardless of which of these you chose. And it will take you roughly the same amount of time to pay off that $25,000.
The right way
There is only one way to consolidate credit card debt that is the right way. It’s through a program called debt relief. This is where you choose a company such as National Debt Relief (NDR) to negotiate with your credit card companies to get both your balances and interest rates reduced. Debt relief is the one right way to consolidate credit card debt because it’s the only way to get your debt reduced, which means you get it paid off the fastest.