Millions of consumers in the US have incurred insurmountable amount of credit card debt. These people fail to exercise financial discipline and continuously use their cards to buy their desired items. Often these people default on their payment due to various reasons and the accruing interest on the principal balance make it unaffordable to pay off. In this situation, they either enroll in acredit card consolidation or settlement program to pay off their debts. But here are a few other ways to pay off your credit card debts without the help of debt relief programs:
- When you are planning to pay off your debts then your primary task should be to prepare a list of the debts that you owe to the creditors. Make sure that you prepare a list of debts in descending order of the interest rate. Try to focus on paying off your high interest debts otherwise the accruing interest on the principal balance will make it unaffordable to pay off.
- You can negotiate with the creditors to lower the outstanding balance to make it affordable to pay off. You can provide evidence to the credit card company regarding your downturn financial situation. If your creditor is not convinced then you can threaten him to file bankruptcy. The creditors are aware that if you file bankruptcy then they will not be able to retrieve the owed amount. Therefore, they might agree to settle the debts and it will be easier for you to pay off.
- Try to make payment more than the minimum balance otherwise you will not be able to reduce the outstanding balance. If you make payment on the minimum balance you will be paying only on the interest rate but your outstanding balance will remain same.
- Prepare a budget plan so that you can keep track of your expenses to curb your extravagant lifestyle. Make sure that you inculcate a good spending habit otherwise you might dissuade from your budget plan. The amount you save each month should go towards paying off your debts.
Therefore, these are the four basic ways to pay off your debts and attain financial liberation. Make sure that you pay off your debts without a single default to achieve a debt free life.