Ways You Can Cut Credit Card Debt

If it seems like you're drowning in credit card debt and you'll never get out, don't panic! Here are some fast ways that you can cut credit card debt, even if you don't think you have any extra money.

Pay More Than the Minimum Payment

Have you looked at the real amount of your minimum payment that actually goes towards paying down your debt? My husband has a credit card with $1,500 on it. If we paid the monthly minimum we would only be paying $7 towards the actual debt, the rest is interest that goes directly to the credit card company for the privilege of carrying their card. It would take my husband over 17 years to pay off the card just paying the minimum payment each month. If he pays just $50 more a month it will take him just over 2 years. See the difference?

Move to a Lower Interest Card

This is a no brainer. Why pay 18% a year when you can pay 9%. You should ask your credit card issuer to lower your rate each year, especially if you pay your bill on time each month. If they refuse, let them know you are shopping around for a better rate. Once they know you may be leaving them they'll likely lower the rates.

Cash out Your Savings

Rather than paying 18% or more a year on your credit card debt, cut your credit card debt by using your savings to pay off the bill. Even if your savings is earning you the stock market average of 11%, you're still paying out more than you're earning. Paying off the debt is like earning 18% risk free.

Borrow From Your Life Insurance

You can borrow the cash value of your life insurance policy. The only risk with this is making sure you repay the loan before you die. Otherwise the amount owed will be taken from the face value, leaving your family with less than they may need.

Home Equity Loan

Using the equity in your home to pay off your debt can do a double win. Your debt will be paid off, and you may be able to deduct the interest from the loan on your income taxes. Don't fall into the trap that many people do though ... don't run up the credit cards again, leaving yourself with the equity loan bill and more credit card bills.

Borrow Against Your 401k

Borrowing against your 401k is a possibility. The interest you pay goes into your account, so you are actually paying yourself more money. However, the loan must be paid back within 5 years, and if you leave your company before then the loan will become due at once. If you don't repay it at this time the amount due will be taxed as a withdrawal, and if you are under 59½ you will pay an extra 10%. Plus the money that you pay back into your 401k is already taxed, and will be taxed again when you withdraw it at retirement.

Renegotiate Terms With Your Creditors

If you are about to be behind on your bills, or already are, renegotiating the terms of the debt can be very helpful. Your creditors want you to pay, so if they know you may not be able to unless they change the terms, they will be willing to listen. In other words, threaten them with bankruptcy.

Borrow From Your Family or Friends

This is a last resort for me. Your family and friends love you and will want to help. Just be sure that you can repay them.

What If These Steps To Cut Credit Card Debt Aren't Enough?

If you are absolutely overwhelmed with credit card debt, then you need to check out debt consolidation/settlement. For a free consultation, click here.

With HFC, you can qualify for a first or second mortgage, or refinance of an existing mortgage, to consolidate your debt

Considered the method of last resort, bankruptcy is a viable method of getting out of debt. Contact a local attorney, well-qualified in Bankruptcy Law, in your area to discuss your options.

Read more Debt Relief Tips & Articles

Getting The Answers You Need

Need help to get your expenses under control fast? Check this out.

Be sure and check out the various debt solution reviews, tips, and articles provided on DebtSteps.com:

Find Your Solution offers a comprehensive list of reviews to get out of debt once and for all. Get answers on bankruptcy, consumer credit counseling, debt settlement, money management, budgeting, loans and mortgages.

Debt Relief Tips & Articles to guide you on your way to financial freedom. Get the lowdown on dealing with debt collectors, handling money problems, understanding your credit, and more.