A Few Credit Card Debt Solutions

Many consumers use their credit cards on a regular basis, and while this is the exact intention of the credit card companies, it may not be the best decision for the consumer who uses the card.

Credit card debt is a growing problem in many households, and as budgets get tighter and tighter it can be quite difficult to eliminate pre-existing and outstanding debt.

Here are some simple and effective credit card debt solutions which include:

1. Designing a household budget – this may seem like an obvious suggestion, but it is truly remarkable just how few households actually create and follow a hard and fast weekly or monthly budget. A budget to help with credit card debt solutions should include those items that frequently go on a credit card, but shouldn’t. These include clothing, entertainment, meals and shopping trips. Instead of thinking that they can go “on the card”, consumers should put a line item on their budget for each of these things. If there is no room in the budget, then a serious review of household expense and income should take place before any more resources are spent on the nice “extras” like movies, shoes and take out food.

2. Payoff high interest accounts – it may be surprising to hear but many consumers are unaware of the interest rates their regular credit accounts are charging them. This is the very reason that some predatory credit companies have been able to charge twenty percent and more on their accounts. These high rates are even being applied to consumers who are up to date and pay bills on time! Credit card debt solutions for high interest rates include making a weekly payment on a high interest account, in addition to a monthly payment that is more than just the minimum due. In this way a consumer eliminates the principal in a much quicker manner than just paying the monthly minimum amount – which is often composed mostly of interest and does not effectively reduce the principal.

3. Try consolidating debt into a single payment – many households have a regular mortgage on their home or property, and these loans are usually at a much lower rate of interest than standard consumer credit accounts. As credit card debt solutions, most banks are happy to make equity loans and second mortgages available to their existing customers, especially if they intend to use the loans to consolidate and payoff outstanding and punishing credit accounts. By relying on the collateral and equity of their home, homeowners will receive a significantly lower interest rate on their consolidation loan than the average interest rate they were paying on numerous credit card accounts. This will free up income in the weekly or monthly budget that can be used for the necessities of life as well as for wiser consumer investment than credit card interest.

With some good, old fashioned common sense and a little organization credit card debt can be reduced and eliminated by consumers everywhere. Under the current economic conditions it is a great idea for every household to investigate any possible method of creating financial savings and strength, and one of the wisest methods is by seeking credit card debt solutions.