One massive type of debt plaguing Americans is credit card debt. Anytime there is a delay or a failure in making a payment or a series of payment, interest rates go up and fines are charged. Even worse, the company can even sue the debtor.
Hence it is very important for a person with such debt to know some of the basic options they have available which help in managing it. Luckily there are very many basic options available. There is however something else that must be a prior consideration before looking at these basic options.
The person must consider first, what brought about the situation. Maybe there was something unforeseen happened such as job loss or a major sickness. However maybe poor financial discipline was at the cause and this is the primary problem that needs to be attended upon.
That being said, of the very many basic possibilities present, a first one concerns acquiring a debt consolidation loan. A debt consolidation loan is a loan over a long term which has a low rate of interest. You use it to pay off all the other bills. Care needs to be taken however that new charges are not begun once again.
Another option is to take out a new credit card with a very low rate of interest and then pay off all the others with this one. If one is not inclined towards taking out a new one, then he or she may call their card companies and see if they can get the rate lowered. If they succeed, then once again they can transfer their balances to the card with the lowest interest rate.
Still another simple solution, commonly called snowballing has to do with first paying off the card that has smallest balance. Upon paying this off, then the next card with the smallest balance is paid off. Note however that you not only pay what you would pay normally, but you also add to it the payment amount of the previously paid off card. The result of this is that as each is paid off one by one, you reach a point where you are paying off the largest card by making the largest payments on it.
In contrast to snowballing is another option known as snowflaking. Here one makes small payments to their cards whenever they come into small amounts of money. For example, if they come into twenty dollars by helping someone clean up their yard or ten dollars from selling something, then they make such small payments. Over time these small payments add up.
In addition to these basic possibilities there are other more advanced ones that can be looked into. Some examples are filing for bankruptcy or getting credit counseling or negotiating a debt settlement. It is recommended that one look into these more advanced options with the help of friends or someone who has sage financial wisdom. One thing however needs to be stated. Whatever the possibilities that one is acting on, he or she will still be in credit card debt if the first problem that needs to be faced concerns financial discipline.
Hence it is very important for a person with such debt to know some of the basic options they have available which help in managing it. Luckily there are very many basic options available. There is however something else that must be a prior consideration before looking at these basic options.
The person must consider first, what brought about the situation. Maybe there was something unforeseen happened such as job loss or a major sickness. However maybe poor financial discipline was at the cause and this is the primary problem that needs to be attended upon.
That being said, of the very many basic possibilities present, a first one concerns acquiring a debt consolidation loan. A debt consolidation loan is a loan over a long term which has a low rate of interest. You use it to pay off all the other bills. Care needs to be taken however that new charges are not begun once again.
Another option is to take out a new credit card with a very low rate of interest and then pay off all the others with this one. If one is not inclined towards taking out a new one, then he or she may call their card companies and see if they can get the rate lowered. If they succeed, then once again they can transfer their balances to the card with the lowest interest rate.
Still another simple solution, commonly called snowballing has to do with first paying off the card that has smallest balance. Upon paying this off, then the next card with the smallest balance is paid off. Note however that you not only pay what you would pay normally, but you also add to it the payment amount of the previously paid off card. The result of this is that as each is paid off one by one, you reach a point where you are paying off the largest card by making the largest payments on it.
In contrast to snowballing is another option known as snowflaking. Here one makes small payments to their cards whenever they come into small amounts of money. For example, if they come into twenty dollars by helping someone clean up their yard or ten dollars from selling something, then they make such small payments. Over time these small payments add up.
In addition to these basic possibilities there are other more advanced ones that can be looked into. Some examples are filing for bankruptcy or getting credit counseling or negotiating a debt settlement. It is recommended that one look into these more advanced options with the help of friends or someone who has sage financial wisdom. One thing however needs to be stated. Whatever the possibilities that one is acting on, he or she will still be in credit card debt if the first problem that needs to be faced concerns financial discipline.
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If your credit card debthas spiralled out of control, visit Payplan.com to find out more about what you can do.
