Best Ways Of Eliminating Credit Card Debt

Eliminating credit card debt can be a very trying experience, especially if you don't have a lot of spare cash lying around to pay your debts. There are several possible ways to eliminate credit card debt, some of which are better than others.

Eliminating Credit Card Debt

If you have large amounts of credit card debt and/or are feeling as if you are in over your head and will never dig out of debt, you have several options:

Self Driven Options

You can make a budget, cut expenses, increase your income and commit to paying back debt. Eliminate any unnecessary costs- don't eat out, cut your cable and cell phone and buckle down. Take on a part time job. Put all of the money you save and all of your extra income towards paying off the debts. If you pay only the minimums, it may take you years to get out of debt, but by dramatically increasing what you pay, you can slash your debt more quickly. Make sure to automate your extra payments or otherwise take steps to ensure the money you save goes towards debt.

Consolidation or Debt Settlement

You can move or consolidate debt. Take out a balance transfer and transfer your credit card debt to a lower interest card with a special promotional rate. Consider a personal loan or debt consolidation loan. If you own a home, you can even think about tapping into the equity with a second mortgage or home equity line of credit and using that to pay off debt. The less you pay in interest, the faster and easier it will be to pay off your debt. However, if you do this, make sure you are disciplined, that you can make the new payments and that you won't charge more on your cards after you transfer the balances off of them. This is especially important if you use your home equity to pay off debt, since you are putting your home at risk.

Bankruptcy

You can declare bankruptcy. This should be a last resort only if you see no other way out. This will only eliminate unsecured debt, such as credit card debts. Student loans, tax debts, and unpaid child support cannot be eliminated in bankruptcy. In addition, if you make too much to qualify for Chapter 7, then you may have to file Chapter 13 and pay back at least some of your debts anyway under a payment plan overseen by the court.