Nobody likes to think about their mounting debt; instead many choose to pointedly ignore it as it grows larger and larger until it is so financially threatening that it can’t be ignored. However, rather than sticking your head in the sand why not proactively start working on paying off your debt and finally getting clear of that dark shadow hanging over your shoulder?
You’re probably saying “But How?” aren’t you? Well, the process of paying off debt whether it is credit cards or defaulted car loans is never easy, but there are ways of doing it, you just have to be willing to consider all of your options carefully and with equal measure.
Here are six daring methods to eliminate your credit card debt.
Pay Double The Minimum Due
The process of paying off debt is a continuous struggle that over time slowly passes as the debt is paid down, but if you are paying the minimum on credit card bills or other debts you will find that the process will take even longer and be even more costly. Debtors like it when you pay only the minimum because the longer it takes you to pay off the debt the more they can tack on interest fees and charges. Instead, look at your finances and figure out what is the highest amount you can feasibly pay toward the debt and pay it every month like clockwork. You’ll be surprised how quickly the debt is paid off when you pay more than the minimum.
Transfer Credit Card Balances
If you have multiple credit cards then you should take a close look at all of your credit cards and sort them from the highest to lowest interest rate. If the card with the lowest interest rate has some room left on it consider transferring some of the charges from one of your cards with a higher interest rate to get around paying as much for the balances.
Cash Out Your Savings/Investment Accounts
You’re probably shaking your head at this, but for some people this could be a smart move to help pay off the debt. Unless you are getting a very high percentage of return on your savings and investments the cost of your debt is working against your savings and investments in the long run.
Borrow Against Life Insurance
If you have life insurance with a cash value you can borrow against the policy to help pay off your debt. It may seem like borrowing from Peter to pay Paul, but many life insurance companies will give you a much lower interest rate on the loan than is commercially available. You can pay off the debts with higher interest rates and be able to take a little bit more time to pay off the loan because of its lower interest rate.
Renegotiate with Creditors
Many creditors are willing to work with you to help you pay off your debt and may be willing to take a much smaller lump sum payment rather than having you go into default and not pay at all. Figure out what you can pay as a lump sum and approach the creditors to see if they are willing to take a smaller lump sum payment to pay off the entire debt.
It is practically a dirty word when it comes to many people, but sometimes bankruptcy is the only option. If you have tried all other avenues of paying off your debt without success, it may be time to file for bankruptcy to get you out from under the weight of your debt and start fresh. It is not for everyone and there are stigmas attached to bankruptcy that can affect you for years after filing, but if no other option is available contact a bankruptcy lawyer to see if it is the right choice for you.