Paying Credit Card Debt the Sneaky Yet Effective Way

In Credit Repair of CreditGuru (October 18, 2009 12:06 pm)

Paying credit card debt has proven to be more difficult nowadays than it was in the past.  A lot of people are facing financial woes brought about by high credit card balances alone.  This combined with the loss of a job, wages being reduced and prices soaring sky high can certainly make paying credit card loans almost impossible or at least it seems like many, many years for one to overcome.  Sometimes, it may look like declaring bankruptcy is the only solution left.  This is really not the case.

There are more efficient and smarter ways for paying credit card debt without the need to declare bankruptcy.  If you find yourself deep in credit card debt, one option is for you to settle the amount of your loan with your credit card company.  Doing so will affect your credit score unfavorably, though.

There is one relatively unknown yet very effective method in paying credit card debt without the need to settle, and that is to negotiate a payment plan with your creditor.

Here’s what to do for paying credit card debt that way.

1. Gather all your credit card bills and statements together.  Make a spreadsheet of all the information about your credit cards, including the creditor, your account number, interest rates of each and of course, the balance incurred.

2. Call every one of your creditors and ask them if you can get a payment plan with reduced interest rates.  If you have been late in making a payment before, creditors will usually take your rates up to 20 percent or more.  Ask if they can decrease it to at least 4 percent.  It wouldn’t hurt to ask.

This one is sneaky but it really works.  If the credit card company does not give you a reduced interest rate payment, discontinue paying your minimum payment.  That’s right, just stop paying.  Make sure to put aside the amount due for your credit card.  It is crucial that you do not spend even just a single dime of this allotment.  This will be used in paying credit card debt once you have been granted a payment plan.

4. Call your creditors monthly to ask for a payment plan.  Let them know that you are highly interested in paying your credit card debt as long as they reduce your interest rates.  Convince them that it is senseless for you to pay a high amount of interest alone when this amount is the budget you have set for food, shelter and transportation.  Tell them that you cannot afford to pay that high an interest rate.

5. Most creditors will agree to your request, given these difficult times.  These are the creditors who have encountered thousands of clients who have defaulted on paying credit card debt.  A payment plan is definitely not as bad as not paying your loans at all.

Always make your payments promptly no matter what, once you have been granted a payment plan.  Late payments will automatically increase your interest rates to even higher proportions.  Remember that this is a payment plan. It decreases your interest, but it does not in any way affect your credit score.  Take advantage of that.  Paying credit card debt will not be as burdensome as it was before with this method.

If you enjoyed this post, make sure you subscribe to my RSS feed!

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment